Annual Report 2010 - Baltika Breweries

Contents
PRESIDENT’ STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
AbouT ThE CoMPANy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
CoMPANy’S PhILoSoPhy . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
MAIN EVENTS of 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
bEER MARKET . ThE CoMPANy’S PoSITIoN . . . . . . . . . . . . . . . . . 10
bRAND PoRTfoLIo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
fINANCIAL PoSITIoN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
KEy PRoJECTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
CoRPoRATE SoCIAL RESPoNSIbILITy . . . . . . . . . . . . . . . . . . . . . 36
PERSoNNEL AND huMAN RIGhTS . . . . . . . . . . . . . . . . . . . 37
LAboR PRoTECTIoN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ENVIRoNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
MARKETING CoMMuNICATIoN . . . . . . . . . . . . . . . . . . . . . 44
CoMMuNITy ENGAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . 45
buSINESS EThICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
CoRPoRATE GoVERNANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
RISK MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECuRITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
CoNSoLIDATED fINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . 64
INTERESTED PARTy TRANSACTIoNS . . . . . . . . . . . . . . . . . . . . . . . 95
INfoRMATIoN foR ShAREhoLDERS AND INVESToRS . . . . . . . 101
CoNTACT INfoRMATIoN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

President’s Statement

President’s Statement
Dear Ladies and Gentlemen,
2010 was a critical year for the Russian brewing
industry, as all brewing companies had
to considerably increase their product prices
to compensate for a tripled beer excise
rate. Baltika was among the companies that
increased their prices in advance, with said
measures affecting sales volume and the
Company’s market share dynamics principally
in the modern trade format.
Lower sales volume resulted in negative
dynamics for the Company’s financial
performance. Despite the decline in sales,
the Company earned a good profit, remained
high profitability and demonstrated the ability
to manage fixed costs in highly volatile
market conditions. All this was possible
due to continually upgrading efficiency and
implementing working capital optimization
projects, as well as having a strategy aimed at
financing priority projects.
During 2010, we continued investing in our
operations. New projects included launching
a new canning line at the Baltika-Rostov facility,
developing an artesian well for drinking water
production in Yaroslavl and implementing two
bio-gas projects at the Company’s facilities
in Yaroslavl and Samara. We also invested
in developing trade infrastructure and upgrading
management systems.
These projects, coupled with favorable
conditions on the raw materials market in H1
2010, enabled the Company to considerably
decrease production costs and contributed
to our financial results.
Throughout 2010, we focused on optimizing our
brand portfolio. We launched a record number
of new beverages in non-beer categories,
including: cider, water and lemonade. At that,
we focused on developing our key product —
beer. By the end of the year, our flagship
Baltika beer brand became one of the top three
best selling consumer brands in Russia.
Integration of the Company into the Carlsberg
Group continued with the launch of the
Baltika No. 7 Export brand, which is produced
under license at the Slavutich breweries
in Ukraine (which are also owned by the
Group). The Company granted distribution
and promotion rights for the Baltika brand
to other companies of the Group in Estonia,
Latvia and Lithuania. We continued
to develop export sales by entering the major
Latin American beer markets of Mexico and
Brazil, expanded our presence in Africa and
strengthened the Company’s position
in Europe.
In Russia, 2010 was marked by obviously
positive economic trends — the country
came out of the recession and almost
overcame its consequences. The dynamics
for household income and the consumer
confidence index were also positive. Due
to these factors, coupled with unusually
hot weather in the Q3 and a gradual price
increase, the beer market in H2 2010
stabilized. Taken together, this gives us hope
that the beer market will grow in the coming
year.
Corporate social responsibility remains
an important component of the Company’s
strategy. This concept implies that the
Company takes into account the interests
of the public and is responsible for the
influence that it has on customers,
consumers, employees, suppliers,
shareholders, local communities and
other stakeholders, not to mention the
environment. We treat social responsibility
as a platform that supports our development.
Social responsibility is integrated into all
of the Company’s operational spheres.
We enter 2011 as industry leaders
with a balanced brand portfolio,
as well as a strong distribution system and
confidence in our future. Market development
will surely depend not only on the
Russian economy, but also on implementing
legal restrictions in the production and sales
of beer. Nevertheless, the Company hopes
to achieve objectives and maintain consumer
loyalty in any scenario.
I would like to thank all of the Company’s
employees for their professionalism,
diligence and creativity.
Let me also thank the Company’s
shareholders and investors for the trust they
place in our management team and for their
belief in the Company’s success.
Anton Artemiev
President Baltika Breweries
Senior Vice President Eastern Europe
Carlsberg Breweries A/S
3

4
Baltika Breweries | Annual report 2010
The Company in 2010
Baltika Breweries was founded
in St. Petersburg in 1990. The use of modern
equipment and advanced technologies and
standards made the Company a top quality
producer. The Company became the leader
in the Russian beer market in 1996 and
has held this title ever since.
Throughout its 20-year history, the Company
has achieved dynamic growth by acquiring
production facilities, commissioning new
ones, expanding and upgrading existing
facilities and broadening the Russian (as well
as foreign) distribution networks. In 2006,
Baltika Breweries merged with three large
Russian beer producers — Vena, Pikra, and
Yarpivo.
Today, Baltika is the largest FMCG
producer in Russia and Eastern Europe.
The Company’s production facilities are
located in 10 Russian cities, including:
St. Petersburg, Yaroslavl, Tula, Voronezh,
Rostov-on-Don, Samara, Chelyabinsk,
Novosibirsk, Krasnoyarsk and Khabarovsk.
In 2008, the Company purchased a brewery
in Azerbaijan. The total production capacity
of the facilities stands at 5.2 million
hectoliters of beer per month.
Baltika is the malt production leader among
Russian and CIS breweries. To satisfy its
malt demand, the Company built two of its
own malting plants in Tula and Yaroslavl.
The facilities capacity of each of these
malting plants stands at 105 thousand
tons per annum. The Company also owns
a 30 % share in the Malt Plant Soufflet
St. Petersburg CJSC (with a production
capacity of 110 thousand tons per annum).
In addition, the Company is developing
its own agricultural project, which is being
implemented in eight Russian regions.
The Company’s diverse brand portfolio
meets the needs of the most demanding
consumers. In addition to Baltika, which
is the key brand, the product range includes
more than 40 beer, low alcohol and nonalcoholic
brands on both a national and
regional scale, including: Arsenalnoe,
Nevskoe, Yarpivo, Tuborg, Carlsberg,
Kronenbourg 1664 beers, Somersby
cider, Zhivoy Ruchey drinking water,
Khlebny Krai kvass and Crazy lemonade.
According to data compiled by the
Canadean and Euromonitor international
2010 marked
the Company’s
20 th anniversary.

The Company in 2010
agencies, Baltika, the Company’s
flagship brand, is the top selling
brand in Europe. It is also one
of the three most valuable brands
in Russia, according to Interbrand
international agency. Baltika
products are produced under
license agreements in different CIS
and other countries.
The Company’s extensive distribution
network ensures that corporate products
are available in 98 % of Russia’s retail
facilities.
Baltic Beverages Holding AB (a subsidiary
of Carlsberg Breweries A/S) became the
Company’s major shareholder in 2008,
holding 89.01 % of the Company’s charter
capital.
5

6
Baltika Breweries | Annual report 2010
Our mission: why we exist
Our mission is the basis for our Company’s philosophy, which reflects our purpose and governs our
Company’s existence.
We create high quality products and develop a culture of responsible beer consumption to bring people
joy and pleasure from socializing.
Our Vision: what we would like to be
Our vision is an orientation point for the Company’s development.
We strive to be the benchmark for the brewing industry, the company setting standards and being
a reference point for breweries all over the world.
For us, being the benchmark means being the leader in three areas: the best brands, the best team,
and the best results.
The best brands: we are market leaders thanks to our strong brands which people choose not
only based on their preferences or possibilities, but also because of their attitude towards our
Company.
The best team: in our Company, highly trained professional specialists cooperate effectively and
achieve the best results in every area.
The best results: Company operates with the highest and most consistent operational profitability
among the largest brewing companies in the world.
Our objectives and strategies: what we are striving for
Our Company’s objectives are the concrete results that we hope to achieve.
Our strategy is the means to achieve the objectives.
Objectives:
To bring the Baltika brand
to the leading positions in the
world.
To increase Baltika’s share
in the Russian beer market
while maintaining high
profitability and the high
quality of our products.
Strategy:
A focus on creating powerful brands, premiumisation, and
innovation.
Leadership in all market segments, regions, and sales
channels.
Maintaining the high quality of our products and the high
level of service.
Constant development of competencies and
professionalism of our employees.
Increasing the efficiency of our business processes along
with operational excellence.
The search for additional sources for profit growth via:
• the widening of sales geography;
• the development of related directions.

Company’s Philosophy
The Winning Behaviours Principles under which we operate
A GlocAl approach is the key to our
overall success.
This entails finding the right balance
between working closely together at
a GLObal level whilst allowing LOCAL
brands and initiatives to flourish.
It requires versatile combinations and
synergy among different cultures.
This is what sets us apart from our
competitors and is critical for our overall
success.
Our customers and consumers are at the
heart of every decision we make
We are responsible for the
following:
• For our consumers, we bear
responsibility for the high
quality of our product and
service;
• For our partners, we
bear responsibility for
the fulfillment of all our
obligations.
We strive to understand the needs and preferences
of our consumers and clients and base our strategy
on this insight.
We strive for perfection and continuously evaluate
the ways we work to improve our professionalism.
Together we are stronger
We respect people’s individuality
and welcome differences in culture,
traditions, and brands.
We value cooperation and working
for a common goal.
It is teamwork that allows our Company to achieve
success; therefore we share best practices and
always help one another, even when this goes
beyond our immediate responsibilities.
We are each empowered to make
a difference
Our Company welcomes
initiative and new ideas for
business development from all
of our employees and enables the
realization of these ideas.
Innovation helps us constantly
develop and strengthen our position
as leaders.
We are not afraid of difficult tasks and take
responsibility for all actions and decisions we take
while keeping in mind that they all affect the whole
Company’s results and reputation.
We want to win
We are constantly exploring
and are always ready to adapt
in response to the latest
challenges.
We are steadfast
in the achievement of our
goals and are prepared to work
proactively, quickly, and boldly.
We do not retreat in the face of difficulties and we
learn from mistakes.
The specific of the market does not affect our
entrepreneurial spirit, for we are by nature leaders
when it comes to attaining results.
We are engaged with society
The Company is responsible
to uphold society’s values, rules
and regulations, and to run our
business in a conscientious way.
We are ecologically and socially
responsible company and we
devote a great deal of attention
to protecting the environment
and to supporting those in need
of our help.
For us, social responsibility is a social partnership
and establishing appropriate working conditions for
our employees.
7

8
Baltika Breweries | Annual report 2010
January
January 1 st Baltika started to supply Asahi Super Dry licensed beer to France and Italy.
February
February 15 th the Company signed a contract to supply beer to numerous African countries.
February 18 th Baltika started producing Žatecký Gus (Zatecky Goose) beer in 0.5 liter aluminum
cans.
February 24 th the Company started producing the new Arsenalnoye Gold beer brand.
March
March 15 th the Baltika No. 20 Jubilee brand is produced to mark the Company’s 20 th anniversary.
March 25 th the first can of Baltika No. 7 Export licensed beer was produced at the Slavutich
breweries (Carlsberg Group, Ukraine).
March 27 th the Khlebny Krai Kvass 7 Grains brand was launched.
April
April 5 th the Siberian Cask Live beer brand was launched.
April 8 th the Company’s financial reports and 2009 dividends were approved at the Company’s
Annual General Shareholders Meeting.
April 11 th the Baltika No. 8 Wheat beer brand received the Silver Medal in the “Wheat Beer,
Unfiltered” category at the World Beer Cup.
April 13 th a new beer canning line was commissioned at the Baltika-Rostov production facility.
The capacity of the new line is 60 thousand 0.5 liter cans and 30 thousand 1 liter
cans per hour.
April 23 rd the new Baltika Draught beer brand was launched.
May
May 4 th the Nevskoe Imperial beer brand was launched.
May 11 th the Žatecký Gus Černý (Zatecky Goose Black) was launched.
May 19 th the Zhivoy Ruchey (Life Spring) drinking water brand was launched.
May 20 th a biological gas installation was commissioned at the Baltika-Samara production
facility.
May 24 th the first batch of the Company’s products was delivered to Costa Rica.
June
Sales of cola, orange and lemon flavored Crazy non-alcoholic drinks began in June.
June 1 st the Company started beer delivery to the Democratic Republic of Congo.
June 4 th the St. Petersburg government named the Company “The Best Taxpayer
in St. Petersburg” for the sixth time in a row.
June 11 th the Company launched a product in the new category — the natural apple cider
Somersby.
June 17 th a brewery museum was opened at the Baltika-St. Petersburg production facility
to commemorate the Company’s 20 th anniversary.
June 24 th the Company started supplying beer to Syria.

Main Events of 2010
July
July 9 th the Baltika No. 8 Wheat, Baltika No. 4 Original and Baltika No. 6 Porter beer brands
were awarded medals at the International Beer Challenge.
July 11 th Baltika beer brands received seven medals at the ХII Big Moscow Beer Festival.
July 28 th the Baltika No. 6 Porter beer brand received the title “Europe’s Best Baltic Porter”
at the World Beer Awards.
August
August 2 nd the Company started exporting beer to Mexico and Brazil.
August 17 th the process of integrating the Company’s subsidiary, Baltika-Almaty LLC and
DERBES Brewery Ltd (Carlsberg Group) in Kazakhstan was completed.
August 26 th a decision on paying interim dividends for H1 2010 was made at the Extraordinary
General Shareholders Meeting, which was held in absentia.
September
September 13 th the first bottling of the Siberian Cask Classic beer brand took place at the Baltika-
Novosibirsk production facility.
October
October 12 th the Company won “The Best HR Project-2010” contest in “The Best Innovative
Project” category for successfully implementing employee development programs.
October 26 th the production of Old Bobby premium beer was launched.
October 27 th the Company was awarded the “Save Energy” National Prize from the Moscow
government in “The Best Energy Saving Project of the Year” category.
November
In November, a biological gas installation was commissioned at the Baltika-Yaroslavl
production facility.
November 2 nd the Company received an award in “The Supplier of St. Petersburg” contest
organized by the St. Petersburg government for its contribution to developing the
consumer market.
November 10 th Baltika No. 3 Classic, Baltika No. 7 Export and Tuborg Green were awarded the Top
Prize at the Russian “Good of the Year” contest.
November 11 th the Company’s Baltika No. 4 Original was awarded the Gold Medal at the
European Beer Stars Awards contest for the third time.
November 15 th the Company signed license agreements with companies of Carlsberg Group for
promoting, selling and distributing Baltika beer in Lithuania, Latvia and Estonia.
November 25 th the Company won the PEOPLE INVESTOR Grand Prix in the “HR Management”
category.
December
December 1 st the Company entered a new segment of the natural malt-based non-alcoholic
beverages market, launching production of Baltika No. 0 Apple, Baltika No. 0 Grain,
Baltika No. 0 Ginger and Baltika No. 0 Lemon for export markets.
December 9 th the Eve peach flavored brand was launched.
December 13 th for the fifth time, the Baltika brand became one of the top three brands in price ratings
prepared by the Interbrand international agency.
In December, Baltika brand was recognized by Forbes Magazine as one of Russia’s
ten most dynamic brands.
9

eer Market .
The Company’s Position

Beer Market. The Company’s Position
The Russian beer market
and Baltika’s positions
For several years, the Russian beer market demonstrated
stable growth, but the world economic downturn affected
2008–2009 market dynamics.
2010 was an extraordinary year for
the Russian beer brewing industry.
As of January 1 st , 2010, the excise
rate for beer with an alcoholic
content of 0.5 to 8.6 % increased
200 %. The Company minimized
the influence of this essential increase
on sales volume by implementing
a pricing strategy based on gradual
price increases throughout the year.
The effect was also somewhat
lessened due to market revival in H2
2010.
2005–2010 Russian Beer Market Dynamics
Beer market,
million hectoliters
As compared with
preceding year, %
The gradual restoration of consumer
confidence and consumer spending which
had fallen during the economic downturn,
strong consumer loyalty and a hot summer
all improved market dynamics in Q3 and
Q4 2010. According to internal estimates
for 2010, the market declined by 4 %, while
demonstrating positive dynamics in H2
2010. In Q4 2010, the market declined
1 % compared to the same quarter in the
previous year.
Based on internal estimates, the 2010
volume of the Russian beer market stood
at approximately 94 million hectoliters.
Year 2005 2006 2007 2008 2009 2010
86.3 94.9 109.7 109.3 98.0 93.9
6 10 16 -0.4 -10 -4
Source: internal estimates
11

12
Baltika Breweries | Annual report 2010
2010 sales volume (in percentage) as compared with 2009
-12
-13
-4
In-market non-beer sales (Russia)
* In-market sales mean products sold by distributors to trade outlets
in Russia.
** Beer sales volume means shipments by the Company, taking
into account product stocks accumulated during 2009 prior to the excise
rate increase.
Total sales volume (including sales abroad
and non-beer products)
Beer sales volume (Russia)
In-market beer sales (Russia)
+42
In-market sales of beer in Russia* fell
4 % compared with 2009, whereas in
2010, total in-market sales dropped
3 %. During Q4, in-market beer sales
in Russia grew 2 %.
In 2010, the beer sales volume
volume in Russia** dropped 13 %
due to distributors building stocks
during Q4 2009 ahead of the excise
rate increase. The Company’s total
sales volume fell by 12 %.
According to AC Nielsen agency
(Urban Russia), the Company’s
market share as of the end of 2010
was comparable to 2009 levels —
standing at 39.7 % (compared with
39.8 % in 2009). A 0.4 % increase
was seen in Q4 2010, compared
with Q4 2009.
The excise rate increase
resulted in an unprecedented
rise in consumer prices. Baltika
was one of the companies who
started to increase its prices
in the beginning of the year.
Therefore, the Company’s
products became more expensive
during the year, compared with
products of its major competitors.
This affected the Company’s market
share — primarily in the modern
trade segment.
The modern Russian beer market
can boast the presence of all major
international beer brewers, including:
Carlsberg, InBev, Heineken, Efes
and SABMiller. The total market
share for these top five companies
exceeds 85 %.

Beer Market. The Company’s Position
Russian market shares for major beer producers
13.2 % 14.7 %
6.9 % 7.0 %
39.8 % 39.7 %
2009 2010
9.7 % 10.7 %
14.4 % 11.7 %
16.0 % 16.2 %
Baltika Inbev Heineken
Efes SABMiller Others
Source: AC Nielsen (Urban Russia)*
*Urban Russia includes towns with a population of more than 10,000 (excluding rural populations).
2010 Economic Development and Consumer Trends
According to data from Rosstat (the Russian Statistics Service), 2010
macro-economic indices looked healthier than 2009 numbers with an 8 %
industrial production increase. GDP and disposable income and retail sales
increased 4 %. The unemployment rate fell 11 %.
The impact of the economic downturn on consumer behavior
was considerable, with the majority of consumers switching their preferences
to less expensive beer and packaging in H1 2010. The significance of the
modern trade channel also grew. Nonetheless, statistical data for H2 2010
illustrates consumers growing interest in premium offers and customary
consumer standards. The modern trade tendency gained strength during the
year.
The Company continued to develop non-beer products in 2010, entering
a number of new categories (see the “Brand Portfolio” section). As of the
end of 2010, total sales of non-beer products in Russia grew 42 %.
2007–2010 dynamics for the Company’s share of the beer market, %
2007
2008
2009
2010
37.4
38.4
39.8
39.7
Source: AC Nielsen (Urban Russia)
13

China
The Republic
of South Africa
14
USA
Brazil
Russia
Germany
Japan
Mexico
Great Britain
Poland
Baltika Breweries | Annual report 2010
International Beer Market
In 2010, Russia remained the position of the fourth largest
global beer market in terms of volume, with per capita beer
consumption totalling 66 liters (Company’s estimate).
Czech Republic
44
35
33
2010 global leaders in beer market volume,
million hectoliters
69
64
88
94
126
239
454
Source: Euromonitor (estimate)
Germany
Slovakia
Austria
Ireland
Slovenia
Estonia
Belgium
Australia
Poland
Finland
USA
Bulgaria
Romania
Russia
Global leaders of 2010 in terms of per capita beer
consumption, liters
66
77
77
76
81
89
87
91
90
102
102
101
98
108
151
Source: Euromonitor (estimate), Baltika internal data

Beer Market. The Company’s Position
Leading international breweries
56 % 19 %
2010
Four companies still control approximately
45 % of the international beer market.
The Company’s Global Position
The Company’s products are sold in more
than 70 countries worldwide. Every sixth bottle
of Baltika beer is sold abroad. The Company
holds a 70 % share of the total volume of beer
exported from Russia. In 2010, the sales
volume abroad for the Company’s brands
grew 19 % compared with 2009, exceeding
3.3 million hectoliters in natural units. The
share of sales abroad in the Company’s total
sales volume increased in 2010, totaling
approximately 8.4 %. The Baltika brand makes
up more than 70 % of the Company’s total
sales abroad.
During 2010, the Company entered major
Latin American markets, including Mexico
and Brazil. The Company also launched sales
in Cameroon and Congo and expanded its
presence in Europe, as well as in Asian and
Pacific countries.
6 %
Deliveries of licensed Asahi Super Dry
to France and Italy were launched in January.
The Company is licensed to produce
bottled (0.44l) Asahi Super Dry beer for 36
European countries. The Company is also
authorized to distribute this brand in Russia, the
Baltic countries and numerous CIS countries.
Deliveries of Baltika No. 6 Porter beer to Finland
were launched in February. Baltika No. 3
Classic became the only Russian beer
available on the high-speed St. Petersburg-
Helsinki Allegro trains.
10 %
9 %
Anheuser-Busch Inbev
SABMiller
Heineken
Carlsberg
Others
Source: Euromonitor
The Company continued its integration
into the Carlsberg Group, with
a line of licensed brands consisting
of Baltika No. 0 Non-Alcoholic, Baltika No. 3
Classic and Baltika No. 9 Extra produced
in Ukraine by the Slavutich breweries
complemented by Baltika No. 7 Export
brand. The Company signed licensing
agreements with Carlsberg Group
companies A/S Aldaris (Latvia), Saku
Olletehase AS (Estonia) and Svyturys-
Utenos Alus (Lithuania) for promoting,
selling and distributing Baltika beer
in Latvia, Estonia and Lithuania.
In 2010, the Company developed a unique
new product — a natural malt-based
non-alcoholic drink with four flavors:
Baltika No. 0 Grain, Вaltika No. 0 Apple,
Baltika No. 0 Lemon and Baltika No. 0
Ginger. The beverages are produced
from non-fermented beer wort and have
a rich malt flavor and the thirst-quenching
capacity of light beer, while containing no
alcohol. Sales of the new product started
in the Middle East in December.
During 2010 the Company represented
the Russian brewing industry at different
international occupational fairs, festivals
and contests, and received numerous
awards for the quality of its products.
15

and Portfolio

Brand Portfolio
Beer brands
Super premium segment
Premium segment
Mainstream segment
Lower mainstream and discount segments
Non-beer brands
17

18
Baltika Breweries | Annual report 2010
Baltika owns a unique brand portfolio, which is the strongest on the Russian beer market. The
portfolio includes more than 30 national and regional beer brands. In addition, the portfolio
includes low alcohol and non-alcoholic beverages, such as kvass, drinking water and lemonade.
The portfolio offers brands for any segment, region or taste.
According to a Forbes Magazine index of consumer goods, Baltika brand became the
best seller among consumer goods produced in Russia, or for Russia. The top fifty brands
in the index included famous corporate brands such as Arsenalnoe, Nevskoe, Yarpivo and
Bolshaya Kruzhka (King-Size Mug).
Tuborg
Tuborg’s leadership in the super
premium segment remains
as stable as ever. The brand’s
position was further strengthened
by producing Tuborg Green
canned in designer cans dedicated
to various musical trends. The
limited number of Tuborg Green
designer cans was launched
in H2 2010. The three versions —
Rock, Hip-Hop and Disco — were
designed by Danesadwork
European agency.
Eve
The Company launched the Eve super premium
brand on the market in the beginning of the
year. This is a totally new product developed
by Carlsberg Group’s process engineers
and is intended exclusively for women.
Baltika specialists developed a unique product
promotion concept and an incomparable bottle
design. These were both used to launch the Eve
brand in Russia. The Eve brand, a completely
natural refreshing drink with a light sparkly taste
and low alcohol content, became popular in no
time. A new peach-flavored Eve was produced
at the end of 2010 to complement the existing
grapefruit and passion fruit-flavored drinks.
Baltika Draught
In the premium segment,
Baltika Draught beer
was 2010’s primary
novelty. What sets the
brand apart is its special
processing technology,
which maintains the
properties of freshly
brewed beer.

Baltika No. 20 Jubilee
Baltika No. 20 Jubilee
was developed to commemorate
the Company’s 20 th anniversary.
This brand is meant for sale only
during 2010. Using numerous
aromatic malts resulted in a unique
light lager taste.
Brand Portfolio
In 2010, the Company continued to actively develop its portfolio, adding numerous new products.
This enabled the Company not only to preserve but also to strengthen its leadership across all
price segments, including entering new market niches.
The Company also developed on its economy brands. During the year, the brand portfolio
was strengthened with the additions of: Arsenalnoe Gold, Bolshaya Kruzhka Yachmennoye
Bochkovoye (King-Size Mug Barley Draught), Sibirsky Bochonok Zhivoe (Siberian Cask Live) and
Uralsky Master Ledyanoe (Ural Master Ice).
Nevskoe Imperial
The package design for all
brands that fall under the
Nevskoe premium brand
line-up was modified in the
beginning of May, and a new sort
Nevskoe Imperial was launched.
Old Bobby
In the fall, the premium portfolio
was complemented by the
addition of the Old Bobby brand,
which is brewed according
to traditional English recipes.
The brand includes two types
of beer — Ale and Lager —
which are bottled in special pint
bottles.
19

20
Baltika Breweries | Annual report 2010
Žatecký Gus
Žatecký Gus, a successful
new mainstream brand which
was first produced in 2009,
was complemented by
Žatecký Gus Černý in May.
This dark beer is brewed
using select light, caramel and
black malt according to the
best Czech brewing traditions.
2010 was marked by the rapid development
of corporate activities in producing non-beer brands.
A record number of different drinks entered the market.
Zhivoy Ruchey
In the end of April, Zhivoy
Ruchey (Life Spring)
carbonated and noncarbonated
drinking water
appeared on the market in the
European part of Russia. The
water is taken from a 80-meters
artesian well in Yaroslavl. The
water preserves its natural
mineralization during treatment.
Khlebny Krai
A new sort of the successful Khlebny
Krai kvass (which production
began in 2009) also appeared on the
market in April. The new Khlebny
Krai 7 Grains contains 7 different
cereals, ensuring the optimal
content of useful ingredients.
According to data presented by
AC Nielsen, compared to 2009, the
share of Khlebny Krai kvass on the
kvass market grew 2.6 %, to reach
7.6 %.

Brand Portfolio
The Company intends to further develop its brand
portfolio to fully satisfy its consumers’ tastes and
preferences.
Crazy
The sales of the Crazy
carbonated soft drink (with
cola, orange and lemon flavors)
began in June. All three flavors
are bottled in 0.5, 1 and 2 liter
PET-bottles — the most popular
packaging for such drinks.
Somersby
The Somersby apple cider —
a premium segment novelty —
was launched by the Company
in the summer. The apple cider
is produced under a license from
the Carlsberg Group. Somersby
is a successful European brand
that is sold in Denmark, Sweden,
Norway, Belgium and Finland.
Somersby is a naturally low
alcohol content (4.7 %) beverage
brewed from apple juice. Key
cities for Somersby sales are
St. Petersburg and Moscow.
21

22
Baltika Breweries | Annual report 2010
Awards
Each year, Baltika presents its
products at various Russian and
international contests. Awards
received by the Company are the
best means to certify the highest
quality of its products. The total
number of awards received by the
Company during the last decade
totals more than 400.
In April, the Company’s Baltika No. 8
Wheat brand won the Silver Medal at the
World Beer Cup international competition
in Chicago (USA). The Company’s
brands were prize winners many
times over at prestigious competitions.
In 2006, the Company’s Baltika No. 0
Non-Alcoholic won the Silver Medal,
while in 2008 Baltika No. 6 Porter
was awarded a Bronze Medal.
In July, the Company’s Baltika No. 8
Wheat won the Silver Medal at the
International Beer Challenge in London
(Great Britain) in the “Wheat —
Hefeweizen and Kristalweizen” category.
Baltika No. 4 Original and Baltika No. 6
Porter won the Bronze Medal in the
“Viennese Lager” and “Baltic Porter
and Russian Imperial Stout” categories
respectively.
Žatechý Gus Černý, a new corporate
brand, won its first Gold Medal at the
XII Moscow International Beer Festival.
The brand was recognized as “The
Best Dark Beer” by festival participants
in the “Peoples’ Testing.” Baltika No. 3
Classic was recognized as “The Most
Popular” beer for the tenth time, while
Baltika No. 0 Non-Alcoholic was named
“The Best Non-Alcoholic Beer.”
Kronenbourg 1664 was recognized
as “The Best Licensed Beer”.

Brand Portfolio
Each of these awards not only
certifies the highest degree
of professionalism of corporate
brewers, but also demonstrates
results achieved by the Company
in upgrading its quality management
system.
Baltika No. 6 Porter was awarded the honorary
title “The Best Baltic Porter in Europe”. The title
was awarded at the end of July at the World
Beer Awards international competition held
in London (Great Britain).
In November, Baltika No. 4 Original was named
the best in the “Red and Amber Lager” category
at the European Beer Star Awards (Nuremberg,
Germany). The Company won the title for the
third year in a row.
Also in November Baltika No. 3 Classic and
Baltika No. 7 Export won the titles of “The
Best Domestic Brand” for the mainstream and
premium price segments in the “Beer” category
at the major “Good of the Year” competition.
Tuborg brand was named the best in the “Beer:
the licensed brand” category.
23

financial Position

Financial Position
In 2010, an unprecedented
increase in the excise duty for
beer increased the selling price for
products of brewing companies.
The increase exceeded the inflation
rate. This reduced the market
as a whole, resulting in a decrease
in the Company’s sales volumes.
The Company mitigated this negative
effect by upgrading the efficiency of all
operations and maintaining a pricing
strategy of gradual price increases
throughout the year.
Key Financial Performance
Indicators
2010 2009
* Operating profit includes other incomes and is adjusted taking into account incomes
and costs from participation in dependent companies.
Change,
2010 / 2009
Sales, million hectoliters 37.6 42.7 -12 %
Net revenue, million rubles 79,307 93,720 -15 %
Cost of sales, million rubles -34,162 -42,466 -20 %
Gross profit, million rubles 45,145 51,254 -12 %
Distribution expenses, million rubles -18,552 -19,150 -3 %
Administrative expenses,
million rubles
-2,429 -2,529 -4 %
Operating profit*, million rubles 23,631 29,618 -20 %
Operating profit before depreciation,
million rubles
29,187 34,262 -15 %
Profit for the year, million rubles 19,171 23,372 -18 %
Operating margin, % 29.8 31.6 -1.8 p.p.
Gross margin, % 56.9 54.7 +2.2 p.p.
ROA, % 33.5 37.2 -3.7 p.p.
ROE, % 42.9 46.5 -3.6 p.p.
ROCE, % 43.9 50.8 -6.9 p.p.
EPS, rubles 112.55 147.14 -23.5 %
25

26
Baltika Breweries | Annual report 2010
A substantial decrease in production and sales volumes
due to the increased tax load and the effect of stocks
accumulated by distributors resulted in negative dynamics for
the Company’s financial performance indicators. However,
despite the above, the Company managed to maintain high
margin and demonstrated the ability to manage fixed costs
in highly volatile market conditions. This was possible due
to continually upgrading efficiency and exercising a high level
of control over costs. For example, administrative expenses
were cut by RUB 100 million during the reporting period.
As with other positive effects, cost optimization was the
result of efficiency increases and expanded outsourcing.
This considerably decreased cost of sales compared with
2009.
Favorable prices for basic raw materials in H1 2010 yielded
good results, as barley and malt prices reached their lowest
point in the last four years. Adverse weather conditions
during the summer of 2010 (harvest ripening season)
decreased the barley crop, which led to a sharp increase
in barley and malt prices by the end of 2010. This affected
year-end profits.
During 2010, the Company
continued to implement
programs to increase
operational efficiency, including:
developing its own agricultural
project, energy saving
measures, expanding cross
production, optimizing the use
of the Company’s transportation
vehicles, developing storage
logistics and the direct delivery
project, “Lean Production” and
much more. Considerable
investments were made
into launching new products,
promoting points of sales,
strengthening the commercial
infrastructure, upgrading IT
management systems and
implementing environmental
projects.

Financial Position
Liquidity and efficiency
Due to high operating profit
in 2010 and working capital
optimization, as well as the
implementation of the strategy
for investing in priority projects,
the Company accumulated
a considerable volume
of free cash flow, the major
share of which was used for
dividend payments according
to a resolution adopted at the
Annual General Shareholders
Meeting. Dividends paid
by the Company in 2010
exceeded RUB 27 billion,
of which RUB 21 billion
were 2009 dividends and
the rest — the interim 2010
dividends. Temporarily free cash
funds were used by the Company
for short-term investments on the
capital market.
During 2010, the Company
continued to upgrade its working
capital management system.
Reducing the working capital / net
revenue indicator more than two
times demonstrates success
in this field.
Despite an increase in the
excise component of receipts,
the share of trade receivables
was considerably reduced.
The improved turnover in trade
receivables can primarily be
attributed to efficient interaction
with the Company’s distributors
and the maintenance of low
overdue trade receivables in the
traditional retail and on-trade
channels.
The deficit on the grain market
(caused by poor grain crop) led
to the establishment of reserve
stocks of barley and malt to cover
market risks, thereby influencing
material stock levels as of the
end of the year. However, the
Company successfully
implemented projects to upgrade
supply chain management, which
helped maintain sufficient stock
throughout the year and reduced
the average level considerably.
10
8
6
4
2
0
Trade working capital / net revenue, 2009 / 2010
%
6.3 %
Trade
working
capital /
Net
revenue
2009
2.7 %
-3.2 %
Stocks Trade
receivables
-2.5 %
Trade
accounts
payable
Achieving strong results for optimizing working
capital made it possible for the Company to focus on
upgrading the quality of services for distributors while
maintaining a sufficient stock of products in highly
volatile demand conditions.
Strengthening partner relationships with suppliers and
implementing efficient financial instruments improved
the turnover of trade accounts payable with no
appreciable effect on the Company’s costs.
Despite a considerable improvement in working capital
efficiency and on-line investment management, the
efficiency of the Company’s assets declined slightly
due to the reduction in operating profit under the
above-mentioned market conditions. It is worth noting,
however, that the efficiecy of the Company’s assets
is still higher than the industry average.
3.3 %
Trade
working
capital /
Net
revenue
2010
27

Key Projects

Key Projects
Logistics
The Company has implemented
cost cutting and efficiency
improvement measures, including
logistics, in 2010. Compared with
2009, specific storage and delivery
costs per liter produced by the
Company decreased 16 %.
The effect was achieved as a result
of corporate efforts to implement
a series of measures to upgrade
supply chain efficiency, including
optimizing the use of corporate
transportation vehicles, expanding
cross production, that is producing
different Baltika brands at different
production facilities, upgrading the
automated production planning
system, moderating service
providers’ prices and optimizing
storage logistics.
The most significant logistics
projects include developing and
launching an open electronic
auction for purchasing delivery
services using third-party motor
transportation. The auction
enabled the Company to hold
down costs despite rising rates for
transportation services. Another
project involved implementing
an open bidding system to repair
the Company’s railway cars.
This system improved supply
agreement conditions. Another
project entailed implementing
a monitoring system for motor
freight transport using the GPS
system, which allowed the
Company to control transportation
route efficiency.
Upgrading storage logistics
continued throughout 2010,
including implementing numerous
projects designed to upgrade
operational efficiency at
warehouses via standardization
the Company’s accounting policy.
A new project called “Regional
Logistics” was launched, which
involved carrying out audits of the
organization of storage using in-
house and third-party warehouses, optimizing the
quantity, geographic location of storage facilities
and warehouse operations. Implementation of the
automated storage accounting system continued
at the Company’s branch facilities. In 2010,
the WMS (Warehouse Management System)
was implemented in both Yaroslavl and Khabarovsk.
During 2010, functions of the “Master of Planning”
supply chain system were improved, with further
widening of production geography.
To upgrade management decision efficiency
concerning logistics and enhancing control over
logistics, a new IT tool, Business Intelligence (BI),
was implemented. Implementing BI accelerated the
response to changes and enabled the Company
to analyze the performance of the logistics service,
upgrading control over all links in the supply chain.
All of the above-mentioned measures contributed
to cutting logistics costs.
29

30
Baltika Breweries | Annual report 2010
Agricultural Project
During the last six years, the
Company has developed its
own agricultural project, which
is designed to ensure required
brewing barley volumes, as well as
to reduce raw material costs while
maintaining high quality products.
In addition, the project contributes
to agricultural development and
provides employment for more
than 15 thousand people across
Russia.
In 2010, abnormally hot and
dry weather in numerous
Russian regions resulted
in a substantial decrease
in the harvest of brewing barley
suitable for brewing purposes
both in Russia and abroad.
The Company managed not
only to maintain a greater
share of its own barley, but
also to further develop the
agricultural project in these
complex conditions. For example,
an area was experimentally sown
in Siberia and Far East. The
Company’s cultivation areas are
located practically all across the
country, including areas in the
Central, Central-Black Earth,
Siberian and Far East regions.
The Company actively uses the
services of agricultural producers
in the Central and Central-Black
Earth regions. In 2010, project
participants included agricultural
facilities in the Tula, Voronezh,
Lipetsk, Ryazan, Tambov, Orel,
Omsk and Amur Regions. The
project has considerable upside
potential in Siberia, the Urals and
the Far East.
In 2010 The Union of Russian
Producers of Beer and Non-
Alcoholic Beverages awarded
the Order “For Services in the
Development of the Beer Brewing
Industry” to Vladimir Sukhonin,
Head of the Department of
Agricultural Projects Management
of Baltika Breweries, for
agricultural project development.
On the whole, the project’s development has been
successful, with an increase in the number of partner
producer. Due to the agricultural project the Company
optimized corporate purchases, as well as increased the
interest of partner producers who receive stable purchase
orders. The high quality of barley is realized thanks
to a developed control system that is applied throughout
the cycle, from seed stock to barley storage.
The Russian Ministry of Agriculture awarded
Ekaterina Azimina, Baltika Vice President for Finance
and Economics, and Alexander Dedegkaev, Baltika’s
Vice President for Supply Chain, with Letters of Merit
for their long-standing work in this sphere of agricultural
production.

Key Projects
Quality Management System
Baltika cares about its consumers and pays significant
attention to product quality and safety.
During the 1990s, Baltika was one of the first
Russian companies to obtain the ISO 9001 Certificate
of Quality.
The Company implemented and maintains the operation
of its Quality Management System (QMS), which enables
the standardization, unification and regulation of key
processes. QMS is a flexible system that ensures the
efficient operation of facilities. The system is being
continuously improved, taking into account Russian and
foreign requirements, as well as changes in business
processes.
In 2009, the Company developed and implemented a Food
Products Safety Management System (FPSMS) at its
St. Petersburg facility. FPSMS development involved
describing the product (beer) production process, the
training of involved employees and performing internal
audits. By the end of the year, the FPSMS at the
St. Petersburg facility was certified as complying with the
ISO 22000:2005 international standard (GOST P ISO
22000-2007), based on НАССР (Hazard Analysis and
Critical Control Points) principles. The inspection audit
was performed by the certifying authority in 2010.
Currently, the Food Products Safety Management System
is being implemented at other corporate production
facilities.
International standards certification is voluntary. It
confirms that the Company’s operations are based on best
international practices used to maintain and upgrade the
quality and safety of products and business processes.
The Company wrapped up implementing the Laboratory
Information Management System (LIMS) in all corporate
branches in 2010. LIMS replaced the previous information
management system, ensuring greater functionality and
flexibility. The new system is just a stage in implementing
a new automated lot accounting system (an accounting
method according to which each lot of goods documented
by one and the same document is stored in individual
packages). The main LIMS functions are to process
and store test result data and to communicate the
data to involved departments. LIMS ensures the quick entry,
analysis, storage and management of laboratory data,
enabling personnel to check test results for compliance with
corresponding regulatory documents and specifications
and to monitor test results in real time throughout the
entire production process, from raw material entry to the
production of finished goods. In addition, the system can be
integrated with other automated systems to facilitate the
solution of tasks for the facility as a whole.
Additional enhancement of LIMS functions and features,
including integration with the Company’s data systems,
is planned for 2011.
31

32
Baltika Breweries | Annual report 2010
Efficiency Improvement Programs
“Lean Production”
The Company continues to develop its “Lean Production”
project intended to minimize all types of costs. In 2010,
Baltika introduced project technologies, including:
Tagging, Value Stream Mapping, Kaizen-blitz (Rapid
Improvement Process), Total Production Maintenance
and the Single Minute Exchange of Dyes. Changeover
time is a vital factor for any company looking to build
its production based on just-in-time manufacturing and
economic lot size concepts. Rapid changeover is a way
to convert equipment to run different products and avoid
storing unusable stock at the Company’s warehouse.
In 2010, the economic benefit of implementing only
one Single Minute Exchange project in the Company’s
bottling room during one peak season month totaled
RUB 30 million. Streamlining production flows, reducing
losses from stock and materials and increasing production
rates and the performance of bottling lines under projects
ensured significant cost saving.
“Your Idea Works!”
The “Your Idea Works!” project is three years old.
The project is designed to search for and implement
ideas suggested by Baltika’s employees. The goal of the
project is to implement production process improvements
which do not require global changes and/or investments.
During the reporting period, the number of ideas received
from corporate employees exceeded 400. In the mediumterm,
potential savings from the suggested ideas could
total approximately RUB 80 million per year.
“Business Excellence Fund”
In 2010, the “Got an Idea!” motivational program for the
sales department was further developed to become the
“BEF” or “Business Excellence Fund.” This program
collects the best ideas suggested by the Company’s
employees related to implementing new standards
of brand activation at points of sale, that are suitable for
subsequent integration into daily practices.
“The Master of Planning”
A cross-functional automatic system called “The Master
of Planning” is used within the framework of the
Company’s initiative to upgrade operational efficiency. The
system distributes volumes among branches based on
forecast demand and numerous other factors, including
supply, production, logistics and sales. “The Master
of Planning” allows costs related to the purchase of raw
materials, production and product delivery along the entire
supply chain to be optimized.
Investments
In 2010, total corporate
investments stood at
RUB 2.9 billion.
Major investments were channeled
at launching and supporting new
products, commercial infrastructure
and information technologies
improvements and were targeted
at efficiency upgrading and cutting
costs. Investment projects included
constructing new grain storage
and renovating the existing one,
as well as numerous environmental
projects. The project for inhouse
water supply provisions
(artesian drinking water) at the
Company’s facility in Yaroslavl
was implemented, thus enabling
the Company to reduce costs and
to start the production of the new
product — Zhivoy Ruchey drinking
water.
Constructing Grain Storage
in Khabarovsk
The Company began implementing
a project that involved constructing
a 3,200-ton grain storage facility
in Khabarovsk in 2010. In-house
facilities for malt and barley
storage will allow the Company
to upgrade grain quality control
and cut costs associated with
leasing third-party storage facilities.
Construction related to the
assembly and installation of silos
was wrapped up in 2010.

Key Projects
Renovating Grain Storage
in Voronezh
Renovating the existing
grain storage involves replacing
the intake plant, the tower, the
head-house and basement
equipment to receive and offload
grain in compliance with industrial
safety requirements.
The Artesian Well in Yaroslavl
The Company surveyed operations
in numerous Russian regions
to find water that has an optimal
and balanced natural chemical
composition, suitable for producing
a new drinking water called Zhivoy
Ruchey. The water produced from
the artesian well developed at
the Baltika-Yaroslavl production
facility meets these requirements
perfectly. The water produced
from a depth is subject to multistage
treatment including fine
purification using nanometric filters
which preserve the water’s natural
mineralization.
On-line Scheduling of Filling
Shops
The integrated development
of information systems for the
Operations Division involves
implementing on-line scheduling
for filling shops. In 2010, on-line
scheduling was implemented at
the Company’s production facilities
in Rostov-on-Don, Tula and
Chelyabinsk. On-line scheduling
is a part of MES (Manufacturing
Execution System) and involves
acquiring data and organizing
the operation of filling shops,
including equipment and software.
Scheduling allows monitoring
filling shops, thus providing
an opportunity to upgrade the
management efficiency of ships.
Utilizing data acquired from on-line
scheduling increased production
equipment efficiency. On average,
efficiency increased 3 %.
Decanting Equipment
Balancing economic, social and environmental
factors, while making managerial decisions, is one
of the Company’s key principles. The Company
invests considerable amounts in energy-saving
technologies and lessening the impact of equipment
on the environment. In 2010, decanting equipment
was installed at the Company’s production facilities
in St. Petersburg, Voronezh and Chelyabinsk.
Equipment for dewatering kizelgur (the material used
to filter beer) was installed within the framework of the
Company’s environmental program. New decanting
equipment will lessen environmental impact by
reducing the volume and mass of wasted kizelgur,
which can be used as raw material in other production
processes.
Launching a New Canning Line at the Baltika-
Rostov Production Facility
A new canning line at the Baltika-Rostov production
facility was installed and commissioned in 2010. The
economic effect and production capacity of the new
line were calculated using “The Master of Planning”
system. The production capacity of the new line
is 60 thousand half-liter cans and 30 thousand liter
cans per hour. Launching the line in Rostov will
decrease delivery costs and broaden the range
of products produced at the facility. Canned beer
produced at the Baltika-Rostov production facility
can be exported to Ukraine, Transcaucasia and
Turkmenistan. The products will also be sold in the
South of Russia.
Bio-gas in Samara and Yaroslavl
To support Russia’s energy-saving policy and
to upgrade power consumption efficiency, the
Company implemented an environmental project
that uses bio-gas as boiler fuel. The project
was implemented in 2010 at two of the Company’s
production facilities in Samara and Yaroslavl.
It is assumed that using bio-gas will cut natural
gas consumption by 10 % per annum. The first bio-gas
project was realized in 2008 at Baltika-Khabarovsk.
33

34
Baltika Breweries | Annual report 2010
Sales Development
In 2010, the Company’s Sales
Division was re-organized
partly due to centralizing sales
channel management. A separate
department was launched to deal
with key national customers.
Within the division, the regional
sales structures were also
individualized.
In addition, the 1 st stage
of the planned changes
in trade marketing function
was completed and the function
was renamed as “Trade Channel
Marketing.” The transformation
was designed to ensure
a new quality of management
at points of purchase*, based
on a deeper understanding
of buyers’ motivation, and to take
this motivation into account,
depending on specific sales
channels.
The first stage of the
transformation included developing
long-term strategies for each
trade channel, optimizing the
principles and processes of crossfunctional
planning for promotional
campaigns, establishing standards
for the activating brands at points
of sale and training key employees
on new operating principles.
Additional transformation will
involve upgrading buyer relations
and synchronizing the operation
of all commercial functions, as well
as increasing the quality coverage
of activations.
The most recent year was marked
by the addition of a significant
number of non-beer beverages
to the Company’s portfolio.
To introduce new beverages
to the market, a special model
was developed, which ensures the
balanced development of both beer
and non-beer segments.
* The point-of-purchase, or POP is the point where a buyer
decides to buy this or that product, brand or package.
The on-trade channel segment was actively developed,
which led to the Company’s record-breaking
performance — with sales growth exceeding 13 %
in 2009. Employees of the on-trade channel continued
to communicate about the Company’s brands in the
HoReCa segment, by developing new segmentation
of the retail trade, which will improve visualization of the
Baltika brands for the channel’s target consumers.
During the year, 4,316 Baltika employees, including top
managers, participated in “Baltika’s Landing Party” action.
This Program was organized by the Company to assist
“field” employees in the sales department during high
season and to share experience.
On November 2 nd , 2010, the Company received the
“Supplier of St. Petersburg” award for its contribution
to developing the consumer market from the City
Government.

Key Projects
Professional Awards
The Company’s achievements
in personnel management
were recognized with two
awards in fall 2010. The
Company was awarded the
2010 PEOPLE INVESTOR
Prize in the “HR Management”
category for its motivational
programs “Your Idea Works!”
and “I’ve Got an Idea!” The
Company also won “The Best
HR Project” contest in “The Best
Innovative Project” category,
for its “PEAK” and “Challenge”
programs. These career
development and continuity
programs were recognized for
being implemented in the best
possible manner.
Investments in Personnel
Continually developing competencies and
upgrading personnel’s occupational skills
constitutes one of the Company’s strategic
goals. The Corporate University of Baltika (CUB)
was established in 2010 based on best practices
in personnel development and training. The
University is intended to offer a complex approach
to corporate development, and to implementing
a development culture in which each employee
is not only aware of the importance of continuous
development, but also uses every development
opportunity provided by the Company. The CUB
departments listed below integrate support and
development tools, career planning and continuity,
as well as training programs for employees across
all levels.
The Leadership and Management Department
supports developing and training managers
across all levels. The Department provides career
development, continuity and managerial skills
programs. Consulting services on managerial
issues are also included in the curriculum.
The Business Skills Department facilitates
upgrading business skills, including: negotiating
and project management, etc. The Department
offers not only training courses, but also programs
for the improving English language skills, as the
language is in greater demand among employees
due to the growing number of international
projects.
The Production and Engineering Department
facilitates professional development in production
and engineering, using mentoring and knowledgetransfer
techniques.
The Occupational Department supports the
development of specific knowledge, such
as finance and information technology, providing
trainees with basic knowledge in related fields.
There is also a Sales Success Department, which
offers training opportunities for employees in the
sales department. These opportunities include field
training and special professional advancement
programs.
To support development, corporate employees
are offered different competency assessment
methods. To identify the strong sides and areas for
development of the Company’s personnel, the
Company uses the following assessment
techniques: annual performance assessment
(mandatory for all employees), assessment and
development centers, “360-degree” assessment.
All these specific methods ensure a complex
approach to development and career planning.
35

Corporate Social
Responsibility

The Company’s philosophy is based on
a “We are engaged with society” principle.
Baltika contributes to societal development
and environmental protection by introducing
business practices that follow corporate social
responsibility (CSR) principles.
In May 2008, Carlsberg Group companies, which
include Baltika, signed on to the United Nations
Global Compact* which stipulates ten principles
of sustainable and responsible development
businesses. These principles are reflected
in the Carlsberg Group CSR Policy, which
was approved in 2010. The Policy covers the
following key areas:
Personnel and human rights;
Labor protection;
Environment;
Marketing communication;
Community engagement;
Business ethics.
Corporate Social Responsibility
In 2010, Baltika reviewed corporate documents
related to CSR to make them consistent with
Carlsberg Group Policy and developed and
approved Baltika’s own CSR policies.
Baltika’s CSR strategy was introduced on
a systemic level and covers all business areas,
from resource conservation to development
a culture of responsible drinking.
* The United Nations Global Compact,
which was launched in July 2000,
is both a political platform and a practical
framework for businesses committed
to sustainable development and
responsible relationships in the business
environment. As an initiative to upgrade
the quality of corporate governance
approved by corporate CEOs, it is focused
on pursuing the universal consistency
of business activities and strategies
with ten universally accepted principles
in the areas of human rights, labor, the
environment and anti-corruption efforts.
Personnel and Human Rights
We value our employees, because they are at the
heart of our success. The Company strives to create
conditions which enable its employees to develop their
skills to the fullest degree in an open and creative working
environment.
Social Partnership
Corporate labor relations are based on respect and
commitment to employees’ rights in accordance with
social partnership principles.
In 2007, Baltika established the Personnel Council,
which is a body that represents the interests of all
employees and enables them to be engaged in the
Company’s social policy management. At the initiative
of the Council and with the involvement of members
of primary trade union bodies, the Company signed
its collective bargaining contract in July 2008, which
governs corporate social and labor relations, establishes
mutual obligations for employees and the administration
and expands employment guarantees for a three-year
period. The main provisions of said contract are related
to compensation packages, work and vacation time,
conditions and labor protection.
Last year, the Company began to develop a new version
of its collective bargaining contract that will be concluded
in 2011 when the existing contract expires.
Compensation and Benefits Package
The salary level at Baltika is one of the highest in the
industry with the well-balanced compensation package.
This enables the Company to attract highly-skilled
personnel and provide good remuneration to employees.
In 2010, the average employee’s remuneration package
increased 8 %.
The compensation package includes a wide range
of benefits and compensation, such as:
Voluntary health insurance;
Life and accident insurance;
Free meals at the Company’s canteens or meal
compensation for employees who are travelling on
business;
Financial benefits in the case of marriage, the birth
of a child, anniversary dates or retirement; and
Additional payments for illnesses, travelling expenses
and other reasons.
37

38
Baltika Breweries | Annual report 2010
Baltika branches operate fitness centers outfitted with
sophisticated workout facilities, saunas and swimming
pools. The Company leases gym halls and football fields
for its personnel and hosts various sporting events.
Baltika owns a holiday center in the Leningrad Region
providing year-round service, including a multipurpose
fitness and entertainment complex. The
complex runs a food production facility fitted with the
most sophisticated kitchen and technical appliances
that caters to 200 people, a 24-meter swimming
pool with an up-to-date water treatment system, four
saunas with mini swimming pools, a workout facility and
a gymnasium.
Baltika employees participate in numerous federal
sporting events, including: “Ski Track of Russia,”
an open mass cross-country skiing race, and city sports
tournaments. In April 2010, the Krasnoyarsk branch
team won the City Cup in the mini-football championship
for the Nevsky District Council of Industrialists and
Entrepreneurs of St. Petersburg. During the reporting
period, more than 1,000 Baltika employees participated
in sporting events.

Corporate Social Responsibility
Labor Protection
Baltika is committed to ensuring
the job safety of all corporate
employees and contractors and
is responsible for meeting high
labor production standards.
In 2010, to monitor compliance
with legal requirements in the
areas of labor, industrial and
fire safety and civil defense, the
Company introduced the socalled
“mutual audit” system,
which are audits performed by the
Company’s branch employees
in other branches. In addition, the
Company developed performance
indicators to assess compliance
with labor protection regulations,
reviewed standards of providing
free work clothes, work boots and
other individual protective gear
to employees and established the
self-assessment system to ensure
compliance with labor protection
regulations. The Company
regularly evaluates job safety rules
compliance by its employees and
holds integrated job safety days.
Production shops are fitted with
hi-tech equipment that regularly
controls technical conditions.
Work places are outfitted with
sophisticated office equipment,
and the production and office
environments are monitored
for lighting, dust content, noise,
ventilation and other indicators.
Employees receive free work
clothes and boots, individual
protective gear, detergents and
disinfectants and drinking water.
Environment
Baltika meets Russian environmental regulation
requirements, national environmental standards and the
provisions of its in-house environmental policy, which were
developed in accordance with CSR Policy.
Under its Environmental Policy, the Company aims
to “optimize natural resources consumption and use
environmentally-friendly products, materials and
technologies.”
Key areas of corporate activity related
to the environment:
Minimize environmental impact;
Upgrade waste treatment; and
Efficiently utilize resources.
39

40
Baltika Breweries | Annual report 2010
Environmental Management
In 2010, the Company began preparations to receive
ISO 14001, an international environmental management
certificate. As part of the preparation process,
Baltika established special working groups to implement
the environmental management system (EMS), developed
a range of internal regulations and guidelines and
identified and assessed environmental issues. ISO 14001
will certify that the Company efficiently implements its
environmental management system which prevents risks
related to environmental impact. The Company carried
out so called “mutual audits” to control environmental
regulation compliance in the spheres of labor protection,
industrial and fire safety and civil defense.
Returnable Bottle Project
The Company looks to optimize
the utilization and processing
of packaging materials
to minimize environmental
impact. To increase the
share of returnable bottles
in the 2010 production
process, the Company
continued to implement its
Returnable Bottle Project.
During the reporting period,
the share of returnable bottles used for production
purposes amounted approximately 36 %. The Company
developed and offered its vendors a special targeted
program focused on turn-in points located in different
Russian regions to up bottle collection. As a result, the
number of glass bottle centers increased 30 % compared
with 2009.
Energy Efficiency
Energy efficiency
is an important component
of Baltika’s environmental policy.
The Company undertakes different
efforts to upgrade energy efficiency,
including projects involving
alternative energy source usage.
In 2002–2003, the Company’s
breweries in St. Petersburg and
Rostov-on-Don commissioned their
own thermal power plants which
allowed them to partially meet their
internal demand for electric and
thermal power. In 2009, the Baltika-
Khabarovsk branch installed a solar
battery system to heat the fitness
center for corporate employees.
Bio-fuel is widely used in Europe
as an alternative energy source.
In Russia, this technology
was first implemented at the
Baltika-Khabarovsk plant which put
into operation a unit to burn biofuel
produced by sewage treatment
facilities. In 2010, the project to use
bio-fuel as a boiler house fuel
was also implemented at Baltika’s
Samara and Yaroslavl plants. These
projects will minimize environmental
impact and conserve natural gas.
As part of the 2010 energy efficiency
program, Baltika has developed
“Leadership Energy,” a special
domestic program aimed at reducing
costs both in primary production
and energy production that
looks to promote efficient energy
resource usage by its employees.
In 2010, the Company collected
more than 400 proposals
to upgrade energy efficiency from
300 employees involved in the
program; most of these proposals
are now being implemented.

Corporate Social Responsibility
In 2009–2010, for energy efficiency
purposes, three of the Company’s
plants (in Rostov-on-Don,
St. Petersburg and Tula) installed
systems for monitoring, measuring
and managing energy resources
which enable them to meet the
challenges of the Company’s
energy use management and
ensure continuous energy saving
and cost reduction.
The automated monitoring,
measuring and managing system
for energy resources is designed
to collect, process, maintain and
display data on consumed energy
resources and enables the
Company to meet the following
challenges:
making the collecting, processing and storing
of data from local measuring stations automatic;
monitoring delivered and used energy resources;
engaging in the technical record-keeping and review
of energy use; and
integrating existing energy measuring systems
in a single information space.
The Company plans to install these systems at all of its
other production sites, putting them into operation and
introducing an operational planning system for its own
energy resources.
In 2010, Baltika joined the non-commercial partnership
“Association of Buyers in the Wholesale and Retail Electric
Power (Capacity) Markets,” which protects the interests
of large power consumers and participates in dialogue
between the business community and governmental
authorities.
41

42
Baltika Breweries | Annual report 2010
Total volume of energy resources used by Baltika in 2010
in physical and monetary terms
Resource type Unit Volume Cost, RUB
Electric power kWh 385,509,751 659,642,692
Gas thousand m3 125,190 378,544,529
Diesel fuel Tons 10,594 162,849,260
Oil fuel Tons 3,866 56,531,472
Bio-fuel thousand m3 1,154 0
Thermal energy MW 1,113,525 585,414,326
Gasoline liters 3,902,664 75,007,561
Gas for loaders
(propane)
Kg 2,018,803 35,650,764
TOTAL 1,953,640,604
For its contribution
to efficient energy use,
Baltika received the 2010
“Save Energy!” national
award, which was launched
by the Moscow Government
and sponsored by the
Russian Ministry of Energy
and the Russian Energy
Agency, and was nominated
for “The best corporate
energy efficiency project” for
successfully implementing
projects to use alternative
energy sources, as well
as for its efforts to upgrade
energy efficiency.

Corporate Social Responsibility
Earth Hour
For two years now, employees of all of Baltika’s
breweries from St. Petersburg to Khabarovsk
have been involved in Earth Hour, a World
Wildlife Fund awareness campaign. The
international campaign is aimed at attracting
public attention to the issues of global warming
and climate change. During this event,
supporters abstain from using electricity for one
hour to reduce greenhouse gas emissions.
Campaigns Involving City Residents
Not only does Baltika fund large-scale
environmental programs, such as constructing
treatment plants and using alternative energy
sources, but it also hosts environmental
awareness campaigns for city residents —
enabling them to contribute to environmental
improvement and to upgrade living standards.
In 2010, Rostov-on-Don held its fourth social
contest for the best yard improvement plan “My
Favorite Yard.” Participants cleaned city yards
and participated in the voluntary clean-up of the
Chukovsky City Park. Baltika’s Chelyabinsk
branch participated in the city target program
“Yard-2010” to develop children’s playgrounds
around the city. Forty young apple trees
were planted in the Krasnoyarsk City Park
to commemorate the 135 th anniversary of the
Company’s brewery in Krasnoyarsk. Chelyabinsk
holds a regular campaign to remove trash from
the Miass River — volunteers and professional
divers cleaned up the river bed and its
embankments. Garbage bins designed by the
Company’s employees and students from the
city’s Institutes of Architecture were installed
in Novosibirsk’s Zayeltsovsky Park as part of the
“Clean City Park” program. In Yaroslavl, the
Company sponsored the city contest “Yaroslavl
in Flowers” to commemorate the city’s 1,000 th
anniversary.
“Zhivoy Ruchey to Wildlife”
In August and September of 2010, the
Zhivoy Ruchey (Life Spring) water brand
hosted an environmental campaign in six
Russian cities. More than 420 volunteers
participated in the campaign and cleaned the
banks of water reservoirs in Moscow, Yaroslavl,
Voronezh, St. Petersburg, Rostov-on-Don and
Samara. Approximately 120 tons of trash were
collected and removed.
43

44
Baltika Breweries | Annual report 2010
Marketing
Communication
The Company undertakes
different efforts to promote
responsible consumption and
voluntarily assumes self-regulation
responsibilities from the Union
of Russian Brewers.
Code of Business
Communication for
Russian Brewers
On March 30 th , 2010, at the
Annual General Meeting
of the Union of Russian Brewers,
representatives from small-,
medium- and large-sized
Russian breweries approved the
Code of Business Communication,
a document that stated existing
and future brewers’ approaches
to advertising. Baltika was one
of the initiators of the Code.
The Code both emphasizes
the strict observance of the
applicable Law on Advertising and
proposes additional and voluntary
restrictions for promoting brewery
products. For example, brewers
shall not use any slang directed
at minors, position the alcoholic
strength of a beer as an advantage
for any beer brand, state that low
alcohol beers help avoid the abuse
of beer and shall prohibit the sale
of beer to minors at public events.
The Special Supervisory Board
consisting of independent
experts shall monitor compliance
with provisions of the Code
of Business Communication. The
Supervisory Board is headed by
Natalia Fonareva, Chairman of the
Russian Chamber of Commerce
and Industry on business
regulation and one of the authors
of the Russian Law on Advertising.
Warning Notice on Packing
Subject to applicable Russian laws, all beer
advertising and promotional materials shall carry
warning notices of the risks associated with abusing
beer. President Dmitry Medvedev in his Instructions
to the Russian Government proposed extending
legal requirements to include consumer packaging
of alcohol products and low-alcohol beverages,
beer and beer-based beverages. The Union
of Russian Brewers proposed that brewing
companies voluntarily put warning notices on beer
packaging without waiting for the relevant legal
requirement.
The brewery companies, members of the Union
of Russian Brewers, including Baltika Breweries,
which had approved the above decision started
to distribute products carrying the warning notice
for risks associated with abusing beer on packaging
as of June 1 st , 2010. The notice must cover at
least 10 % of a bottle label or the surface-side
of a can and carry warnings of the harm from
beer abuse, as well as a sign “18 — Selling beer
to minors is prohibited” designed and approved by
the Union of Russian Brewers.

Corporate Social Responsibility
Community Engagement
Caring for communities is one
of the basic principles of the
Company’s operations. We are
aware of the impact that we
have on local communities
in which we operate, as well
as our opportunities to cooperate
with them. Therefore, we take
responsibility for making a positive
contribution to these communities’
development.
Beer Patrol
In 2010, Baltika continued
implementing its social project
“Beer Patrol,” which was originally
launched in 2008. The Project
looks to pursue public control
over complying with the law that
prohibits beer sales to minors.
Public inspections are carried
out at all public events hosted by
Baltika and in all retail outlets.
In 2009, the Company carried
out inspections to prevent the
improper and negligent conduct
of sellers in 24 Russian cities,
including: Astrakhan, Voronezh,
Volgograd, Yekaterinburg,
Ivanovo, Krasnodar, Krasnoyarsk,
Lipetsk, Moscow, Novomoskovsk,
Novosibirsk, Penza, Omsk,
Rostov-on-Don, Samara,
St. Petersburg, Sochi, Stavropol,
Tambov, Tula, Ufa, Khabarovsk,
Chelyabinsk, Yaroslavl and
Alma-Aty in Kazakhstan. In 2010,
Belarus and three additional
Russian cities — Kaluga, Kursk
and Orel — also joined the project.
In 2009–2010, the Company
conducted 80 raids and inspected
approximately 1,000 retail outlets
and reported violations in roughly
one third of them.
Beer Patrol is expanding its geographic coverage,
increasing the number of program participants and
shifting the emphasis on the Company’s involvement
in the project. The Company acts less as an inspections
organizer and more as an expert assisting in the
supervision and public organization of efforts to combat
legal violations. In 2010, the Company sponsored the
Public Control initiative in Yekaterinburg, Civil Patrol
in Samara and Public Control raids in the Southern
Federal Region towns.
Project efforts include putting up a special sign “Are you
18? Prove that!” in retail outlets, as well as educating
sales personnel about necessary steps to check a buyer’s
age. These efforts are preventive in nature and enable
the Company to reduce the amount of unauthorized beer
sales to persons under the age of 18.
Are you 18? Prove it! The sale of beer to minors is prohibited. It’s the low!
You can show your passport, driving license or student card
45

46
Baltika Breweries | Annual report 2010
The Culture of Responsible Drinking
In addition to the brewing history museum in Krasnoyarsk,
the Company opened a new museum at the
Baltika-St. Petersburg plant in 2010.
The opening ceremony for the Brewing History
Museum in St. Petersburg coincided with Baltika’s 20 th
anniversary on June 17 th , 2010. The Museum has six
main sections. Visitors can learn about the history
of brewing starting in Ancient Egypt and can take a look
at a Russian cabin and learn about Russian brewing
traditions and its role in peasants’ life. The section on
Russian brewing traditions reconstructs the atmosphere
of a St. Petersburg dive in the late 19 th – early 20 th century
(the Russian dive is a bar that sells porter). The display
includes a collection of decorative art objects, a unique
collection of beer bottles, brewers’ appliances and
one of Russia’s largest collections of hutter stoppers
manufactured in Germany more than 100 years ago
(which have a high historical and artistic value). The
Soviet period is represented by a traditional 1970s beer
tank. The contributions of the Carlsberg and the Jacobsen
family, founders of the Danish brewing industry, to the
development of the brewing industry, science and art are
represented in the section devoted to European brewing.
The museum exhibition includes the history of Baltika.
Visitors can see how the plant looked 20 years ago,
as well as the Company’s first labels, bottles and mugs.
In 2010, the Company hosted several photo shows
“Beer. 100 years of history in photographs” based on
photographs collected by the Museum. The Company
presented shows in special tents at the kvass and beer
festivals during the summer in different Russian cities,
as well as in local galleries and museums.
Charity and Sponsorship
For many years, Baltika has provided targeted charitable
and sponsorship support in all regions in which it is present.
In 2010, the Company contributed RUB 122 million
to charitable projects and important social events.
The Company’s public efforts are focused on funding
health and social protection projects and sponsoring city
celebration events.
The Company completed its largest charitable project
in 2010 in Yaroslavl — it funded the overhaul of the
regional children’s hospital to coincide with the City’s
1,000 th anniversary.
Under a long-term cooperation and support project
with Turner Children’s Orthopedic Research Institute,
Baltika funded the renovation of the Institute’s laboratory
department. Baltika sponsored the St. Petersburg
Children’s Hospice, the Mountain House of Hope
rehabilitation center, the
Tula Emergency Care Hospital
named after Vanykin and the
Chelyabinsk city social movement,
Iskorka, to help pediatric oncology
patients.
To commemorate the 65 th
anniversary of World War II
victory, Baltika paid special
attention to veterans. The Baltika-
Novosibirsk branch hosted
a gala concert for members
of the Novosibirsk Society
of Victims of the Leningrad Siege
“Blockadnik” and presented
gifts to all veterans. Targeted
social assistance was provided
to 400 veterans, invalids, war
participants and workers on the
home front. The Company funded
the reconstruction of the Main Line
of the Tula Defense Memorial.
The Company continues to provide
charitable support to local
sport clubs, including: Dynamo
volleyball club in Khabarovsk, the
Rostov-on-Don handball club,
the Yenisei Russian hockey club
in Krasnoyarsk and Sibselmash
in Novosibirsk.
The Company contributed
more than RUB 10 million
to supporting City Days and other
public events across Russia.
In 2010, Baltika funded City Days
in Khabarovsk, Krasnoyarsk,
Novosibirsk, Tula, Rostovon-Don
and the Leningrad
Regional Anniversary event
in Kingisepp. For many years,

Taxes
Corporate Social Responsibility
the Company has been a partner
of the St. Petersburg International
Economic Forum.
In 2010, Baltika participated
in 60 celebratory events across
Russia and hosted some
of them. Within one year, more
than 1.5 million Russian citizens
visited events hosted or supported
by the Company and paid tribute
to a large selection of beers and
non-alcoholic beverages offered by
the Company, listened to various
musical styles and participated
in contests, competitions and
campaigns aimed at promoting
responsible beer consumption. The
hosts emphasized banning the sale
of beer to minors under 18.
Last year, Baltika participated
in kvass and beer festivals in ten
Russian cities: St. Petersburg,
Moscow, Yaroslavl, Tula, Sochi,
Rostov-on-Don, Samara,
Novosibirsk, Krasnoyarsk and
Khabarovsk. Large-scale musical
events were held under the auspices
of the Company’s popular brands:
the Ilmen Festival of Art Songs,
GreenFest, Transmusicales,
the Stereoleto session and the
Movida Corona concerts.
Baltika is one of the largest taxpayers
generating a significant portion of tax
revenues in cities where the Company’s
headquarters and branches are located. The
timely and full payment of taxes to budgets
across all levels is customary for a socially
responsible company that strictly complies
with Russian laws. In 2010, the Company’s tax
payments to budgets at all levels and extrabudgetary
funds totaled RUB 50.6 billion.
For many years now, Baltika has been the
company that generates the largest tax
revenues for St. Petersburg’s budget.
Promotion of Popular Traditions
During the summer, the Khlebny Krai kvass brand
held entertainment and awareness campaigns, “Kvass
Parties,” in ten Russian cities. Approximately four
thousand people — mostly children and teenagers —
participated in these campaigns. The campaigns were
aimed at making young Russians aware of popular
Russian traditions. The hosts invited experts
in old popular crafts and held contests for the best
knowledge of popular traditions, proverbs and sayings.
In Samara, children learned to make pottery, birch
bark platting, embroidery and crochet work. In Rostovon-Don,
they painted clay and wood work, learned
the basics of popular singing and played popular
instruments. In Kazan, children learned to weave
beads, cut wood, weave and make leather mosaics.
They also learned a lot about the history of kvass and
its role in Russia’s national culture. These campaigns
are aimed at developing a healthy society and
preserving spiritual heritage, as well as spurring the
interest of young Russians in Russian history and
promoting patriotism.
Business Ethics
The Company follows generally accepted norms
and best practice business ethics. The Company’s
business ethics policy establishes corporate principles
for running the business as a responsible partner
and is an instrument to protect its reputation. The
policy includes a set of key provisions, in particular,
the Conflict of Interests provision under which the
Company only pursues business interests when
selecting new partners and concluding agreements
and avoids any conflicts of interests with existing
business connections and the personal interests
of its employees; the Provision on Complying
with Competition Laws under which the Company
makes efforts to prevent unfair competition
in business practice and partner relationships; the
Fraud Prevention Provision and the Provision on
Inadmissible Corrupt Practices.
47

Corporate
Governance

Baltika adheres to best practice corporate
governance standards in full accordance
with the Corporate Governance Code, which
has been approved by Russian securities
authorities:
All shareholders have the right to effective
protection if their rights have been
infringed on;
Shareholders have access to reliable and
effective settlement methods for share
ownership rights;
Shareholders are able to participate in the
Company’s management by adopting
decisions on the most important aspects
of corporate activity at the General
Shareholders Meeting;
Shareholders have the right to receive
regular, full and accurate corporate
information;
Shareholders do not abuse their rights;
The Company exercises control over
using confidential and proprietary
information.
Corporate Governance
Observing the Corporate
Governance Code
The Company observes the following provisions of the
Corporate Governance Code, concerning:
Holding the General Shareholders Meeting:
Shareholders have the right to introduce items
in to the General Meeting’s agenda, as well as the
right to request convening a General Shareholders
Meeting without providing an extract from the
shareholder register;
The Company informs shareholders about
convening a General Shareholders Meeting not
less than 30 days prior to the date of the Meeting,
regardless of agenda items, if legislation does not call
for a longer period of time;
The Company’s President, members of the
Board of Directors, members of the Internal Audit
Committee and the Auditor, as well as candidates
for indicated management and control bodies, are
required to attend the General Shareholders Meeting;
The Provision on the Company’s management and
control bodies stipulates the availability of registration
procedures for participants at the General
Shareholders Meeting.
Activities of the Company’s Board of Directors, as well
as requirements for its members:
The Board of Directors is elected via cumulative
voting;
Members of the Board have the right to receive
corporate information that is necessary to fulfill their
functions. The order for conducting Board meetings
is stipulated in the Provision on management and
control bodies;
The approval of the Company’s annual budget (for
current operational economic activities), as well
as the investment budget, falls under the competency
of the Company’s Board of Directors in accordance
with the Charter;
The Company’s Provision on management and
control bodies stipulates that Board members must
act in the interests of the Company (preventing
conflicts of interest);
49

50
Baltika Breweries | Annual report 2010
Baltika Management
Members of the Board
of Directors are required
to inform the Company
of any transactions
that involve corporate
securities;
The Board of Directors
does not include individuals
who have been found
guilty of economic
crimes or crimes against
governmental authorities or
the interests of State and
municipal services;
The Board of Directors
does not include persons
who are participants, CEO
(Manager), members
of a management
body or as employees
in a competing legal entity.
Denis Sherstennikov
Vice President,
Marketing
Requirements for the Company’s control bodies on financial and
economic activity:
A document was adopted by the Company’s Board of Directors
that defines corporate internal control procedures — the
Provision on internal control and auditing financial and
operational activity;
A special corporate division exists that observes internal control
procedures: the internal audit and control department;
Internal control bodies do not include individuals who have been
found guilty of economic crimes or crimes against governmental
authorities or the interests of State and municipal services;
Internal control bodies do not include persons who are
executives, participants, CEO (Manager), members
of a management body or employees in a competing Company;
The internal audit and control department informs the Board
of Directors’ Audit Committee on any detected violations;
The Audit Committee evaluates auditor’s conclusions prior
to submitting them to shareholders at the Company’s General
Shareholders Meeting.
Ekaterina Azimina
Vice President,
Finance and
Economics

Anton Artemiev
President
Governance Structure
Security
Director
Corporate Governance
Vice President,
Finance
and Economics
IT Director
Vice President,
Marketing
Corporate
Affairs
Director
Denis Lysak
Vice President,
Sales in Russia
President
Vice President,
Supply Chain
HR Director
Legal Director
Alexander Dedegkaev
Vice President,
Supply Chain
Vice President,
Sales in Russia
Export Sales
Director
51

52
Baltika Breweries | Annual report 2010
Information disclosure requirements:
A Provision on information policy was adopted to define
rules and approaches for information disclosure. On the
Company’s corporate web site (www.corporate.baltika.
ru), official information regarding corporate activity
is published; other information is also regularly disclosed
on the site. In addition to this, information that requires
compulsory stock market disclosure is published on
the Interfax newswire. Izvestia newspaper is the official
print media outlet that the Company uses to inform
shareholders about convening general meetings.
The Company’s Board of Directors approved the Provision
on insider information, which refers to information that
is not publicly available and the disclosure of which may
substantially affect the market price of the Company’s
securities.
General Shareholders Meeting
The General Shareholders Meeting is the Company’s
supreme management body. In full accordance with
applicable laws and the Company’s charter, the
following issues fall under the competency of the
General Meeting:
Introducing amendments and alterations to the
Charter or adopting a new edition of the Charter
(except in cases indicated in the Russian law “On
joint stock companies”);
Corporate re-organization;
Liquidating the Company, appointing a liquidation
commission and approving intermediate and final
liquidation balances;
Defining the number of members on the Company’s
Board of Directors, electing its members and early
terminating their powers;
Determining the number, nominal value and category
(type) of authorized shares and rights granted by
these shares;
Increasing charter capital through a higher nominal
share value. Upping charter capital by placing
additional shares only in those cases, when in full
accordance with Russian legislation, such resolutions
can only be adopted by the General Meeting;

Corporate Governance
Decreasing charter capital
by decreasing the nominal
value via the Company’s
acquisition of a portion
of shares to decrease
their total number, as well
as by cancelling purchased
or bought back corporate
shares;
Electing members of the
Company’s Internal Audit
Committee, as well as early
terminating their powers;
Approving the Company’s
auditors;
Paying (announcing)
dividends based on Q1, H1
and nine month financial year
results;
Approving annual reports, annual accounting
reports, including the Company’s profit and loss
statements (profit and loss accounts), as well
as profit distribution (including the payment
(announcement) of dividends, excluding profit
distributed as dividends as a result of Q1, H1, nine
month or FY) and corporate losses as a result
of the financial year;
Defining the order of conducting the General
Meeting;
Splitting and consolidating shares;
Adopting resolutions on approving transactions
in cases defined by Article 83 of the Russian law
“On joint stock companies;”
Adopting resolutions on major transactions in cases
defined by Article 79 of the Russian law “On joint
stock companies;”
Purchasing (by the Company) placed shares
in cases determined by the Russian law “On joint
stock companies;”
Adopting decisions on participating in financial
and production groups, associations and other
commercial organization unions;
Adopting internal documents regulating the
activities of the Company’s bodies;
Resolving other issues, as foreseen under the
Russian law “On joint stock companies.”
In 2010, the Company held two General Shareholders
Meetings: one annual (AGM) and one extraordinary
(EGM).
On April 8 th , 2010, the Company held its Annual General
Shareholders Meeting, which approved the annual
report, the profit and loss statement based on full
year results and 2009 profit distribution and dividend
payments in the amount of RUB 128 per share.
The General Meeting elected the Company’s Board
of Directors and the Internal Audit Committee, as well
as approved the Company’s auditors: CJSC A&P
Audit and ZAO KPMG. In addition, new revisions
of the Charter and the Provision on the Company’s
management and control bodies were adopted, as were
interested party transactions with Baltic Beverages
Holding AB and Russian Railways OJSC and its
affiliates.
On August 30 th , 2010, an Extraordinary General
Shareholders Meeting was held via absentee
voting, during which shareholders approved paying
(announcing) dividends for H1 2010 in the amount
of RUB 42 per share.
53

54
Baltika Breweries | Annual report 2010
The main tasks of the Board of Directors
include:

Hans Kasper Madsen
Born 1961, higher education
Member of the Board of Directors
since 2008
Holds positions in the following
organizations:
• Carlsberg Breweries A/S,
Senior Vice President,
Operations
• Danish Malting Group A/S,
member of the Board
of Directors
Corporate Governance
Ulrik Andersen
Born 1965, higher education
Member of the Board of Directors
since 2009
Holds a position in the following
organization:
• Carlsberg Breweries A/S,
General Counsel & Vice
President Legal Counselling
and Risk Management
• Baltic Beverages Holding AB,
member of the Board
of Directors
The Company’s Board of Directors consists
of seven members, including two independent
directors.
During the reporting period, the membership
of the Company’s Board of Directors
underwent the following changes: on April 8 th ,
2010 Alexander Izosimov was replaced by
Vladislav Grib.
During 2010, 17 meetings of the Company’s
Board of Directors were conducted — both
in person and via absentee voting.
Vladislav Grib
Independent Director
Born 1972, higher education
Member of the Board of Directors
since 2010
Holds positions in the following
organizations:
• The Russian Academy of Legal
Sciences, Chairman of the
Executive Committee
• Yurist (Lawyer) Publishing Group
Ltd, Editor-in-Chief
• The Federal Chamber
of Russian Federation Lawyers,
Vice President
• Head of the Civil Society Chair
at the Moscow State Institute
of International Relations, MFA,
RF
Alexander Shokhin
Issues considered at meetings of the
Company’s Board of Directors included the
following:
Approving the Company’s strategic
development plans;
Approving launch of new products,
including: Old Bobby beer, Somersby
cider and Zhivoy Ruchey drinking water;
Concluding licensing agreements;
Approving the 2011 Company budget.
Independent Director
Born 1951, higher education
Member of the Board of Directors
since 2008
Holds positions in the following
organizations:
• RUIE, President
• The State University — Higher
School of Economics, President
• Lukoil OJSC, member of the
Board of Directors
• Fortum OJSC, member of the
Board of Directors
• Russian Railways OJSC, member
of the Board of Directors
• TMK OJSC, member of the Board
of Directors
• TNK-BP Limited OJSC, member
of the Board of Directors
• Novorossiysk Sea Trade Port
OJSC, member of the Board
of Directors
55

56
Baltika Breweries | Annual report 2010
Committees of the Company’s
Board of Directors
Audit Committee
The purpose of the Committee is to upgrade the
effectiveness and quality of work of the Board
of Directors in fostering and ensuring open
communication with auditors, the Internal Audit
Committee and structural divisions of the internal
audit, accounting and finance and economic division
of the Company via the preliminary consideration
and preparation of recommendations to the Board
of Directors on the following issues that fall under the
competency of the Committee:
Risks associated with corporate operations;
Management reporting;
Financial accounting;
External independent audit and internal audit;
Internal control procedures.
The Nomination and Remuneration Committee
The primary purpose and principal activities of the
Nomination and Remuneration Committee consist
of contributing to involving qualified specialists
in corporate governance, and in creating incentives for
efficient functioning.
The basic documents regulating the activities
of the committees and in determining their frame
of reference, membership and functions are the
following:
Provisions on the Audit Committee of the Board
of Directors (approved by a resolution of the
Board of Directors as of September 6 th , 2006,
Minutes No. 6/n as of September 6 th , 2006);
Provisions on the Nomination and Remuneration
Committee of the Board of Directors (approved
by a resolution of the Issuer’s Board of Directors
as of March 27 th , 2007, Minutes No. 5 as of March
27 th , 2007).
The sole executive body
The sole executive body of the
Company is the President, who
is responsible for managing the
Company’s current operations. Anton
Artemiev has held this position since
2005.
Remuneration for
members of management
bodies
In accordance with Item 2 of Article
64 of the Russian law “On joint
stock companies,” on April 2 nd ,
2009, the Company’s AGM set
the maximum remuneration for the
Board of Directors’ independent
directors at RUB 3,900,000. The
Board also set a maximum for
expense compensation (incurred
while carrying out functions as Board
members) at RUB 450,000 —
leaving this amount at the same
level as in the previous year
and converting the amounts set
in dollars into rubles, thus following
the Company’s policy on reducing
liabilities in foreign currencies. During
2010, independent directors received
remuneration totaling RUB 3,039,558.
In accordance with Item 3 of Article
69 of the Russian law “On joint
stock companies,” the rights and
obligations of the Company’s
President are regulated by the
indicated law and the corporate
charter, as well as an agreement
concluded between the President
and the Company. Remuneration
for fulfilling the function of the sole
executive body, and other work
conditions, is regulated by a labor
agreement signed between the
President and the Company.

Corporate Governance
The Audit Commission
In accordance with current Russian legislation
and the Company’s Charter, the Audit
Commission (a permanently operating
elected body) executes periodic control
over the Company’s financial and
operational activities, as well as the actions
of its management bodies and executives
(including separate divisions, services,
branches and representative offices) by
checking on the following:
The legitimacy, economic feasibility and
effectiveness (expediency) of financial
transactions and operations carried out
by the Company during the examined
period;
The completeness and accuracy of the
Company’s administrative documents
which reflect the Company’s financial
transactions and operations;
The legitimacy, economic feasibility and
effectiveness (expediency) of actions
taken by the Company’s executives
and the heads of structural divisions
to ensure compliance with relevant
legislation, the Charter, adopted plans,
programs and other internal corporate
documents.
The three-member Audit Commission
is elected by the Annual General
Shareholders Meeting. Members of the Audit
Commission are not allowed to be members
of the Company’s Board of Directors or
to hold any other corporate management
positions.
The following persons were elected to serve
as members of the Company’s Audit Commission
at the Annual General Shareholders Meeting, which
was held April 8 th , 2010:
Vibeke Aggerholm
Born 1964, higher education
Vice president for Internal Audit at Carlsberg
Breweries A/S, member of the Board of Directors
for the Institute of Internal Auditors (IIA)
Charles Ericsson
Born 1948, higher education
Consultant for Baltic Beverages Holding АВ
Nadezhda Bazilevich
Born 1975, higher education
Financial manager for Baltika Breweries
Interested party and major
transactions
During 2010, Baltika Breweries completed
72 interested party transactions. No
transactions that are recognized by applicable
Russian legislation or the corporate charter
as major transactions were completed during the
reporting year.
A complete list of interested party transactions
is provided in the appropriate section
of this Report.
57

58
Baltika Breweries | Annual report 2010
Risk management
The Company’s operation is subject to various business
risks. The Company has developed a special risk
management system to prevent, identify, control,
monitor and minimize risks. The risk-related policy
and management system are subject to periodic
analysis and revision in accordance with changes in the
Company’s operation, as well as in external conditions.
The Company’s Board of Directors is responsible for
implementing the risk management system. The Board
of Directors also controls system functioning. The
Audit Committee of the Company’s Board of Directors
controls adherence to the risk management policy
and analyzes the expediency of the risk management
system, in conjunction with the Company’s Internal Audit
Department.
In case any of the risks listed below arise, the Company
is ready to take appropriate measures to minimize their
consequences.
Financial Risks
The Company’s primary financial risks are associated
with foreign exchange, credit and liquidity. To minimize
financial risks that can affect the Company’s financial
performance, a complex action plan has been developed
and implemented that consists of the following points:
To analyze financial risks, yearly, quarterly, monthly,
etc. planning, evaluating actual profitability and cash
flow, calculating the open FX position;
Implementing cost cutting programs;
Budget control on an on-going basis;
Controlling working capital — the Company
implements a program to manage accounts
receivable, accounts payable and stocks;
The Company grants secured supplier credits to its
buyers.
Foreign exchange risks may arise
due to changing exchange rates.
The risk is inherent to purchasing
raw materials and services
the Company uses that are
denominated in foreign currencies.
The Company’s foreign
exchange risk exposure
is high, since a significant share
of the Company’s sales is rubledenominated,
whereas prices
for equipment components and
raw materials used in production
are denominated in foreign
currency. The Company makes
every effort to reduce foreign
exchange risks. Measures
include reducing foreign currency
liabilities, as well as increasing
the number of domestic suppliers
of raw materials, fixed assets and
components. The Company also
uses passive instruments to hedge
foreign exchange risk.
One of the Company’s main tasks
is to increase foreign currency
revenues by increasing export
volume.

Corporate Governance
Credit risk may arise primarily
due to failures of the Company’s
buyers and agents to meet their
contractual obligations. The risk
is associated mainly with accounts
receivable. The Company’s credit
policy defines relationships with
buyers. The Company performs
periodic credit evaluations on
its customers — the Company’s
customers are required to provide
securities for accounts receivable.
Liquidity risk. The availability
of free cash funds makes the
Company less prone to liquidity
risk. The Company’s cooperation
with major Russian and
international banks, which provide
a broad range of financial services,
minimizes liquidity risks if shortterm
cash shortages occur.
Despite the availability of free
cash funds, the Company actively
implements liquidity management
and control methods, which are
based on the following procedures:
Medium- and short-term
planning for the volumes and
structure of revenues and
costs related to liabilities and
assets;
Forming an optimal asset and
liability structure;
Controlling the balance
between assets and liabilities
in terms of volumes and due
dates.
Liquidity analysis enables the
Company to forecast in a timely
manner the probability of liquidity
decreases and is the basis for
the preparation, grounding and
adopting managerial decisions.
Market risk. The principal market risk factors that
can affect corporate development are the following:
Higher prices for basic raw materials due to corn
failure;
Further increases in the excise tax rate;
Tightening governmental policy, resulting
in limitations concerning the production, sale,
consumption and advertising of beer;
Changes in consumption structure;
Beer consumption nearing the saturation level;
Increasing competition;
Higher rates set by natural monopoly providers;
Unfavorable weather conditions which can affect
sales;
Economic downturns.
To strengthen its industry position and to mitigate market
risk, the Company has implemented an action plan,
consisting of the following: developing the Company’s own
agricultural project; optimizing profitability and production
cost management; implementing the Company’s
marketing strategy focused on forming strong brands,
bonuses and innovations; developing and producing new
products; developing distribution systems and promotion
channels; engaging in further geographical expansion
and developing beverages that are alternatives to beer;
optimizing investment activities; completing the complex
evaluation of the financial condition of supplies; supporting
suppliers (when necessary); diversifying risks; upgrading
the efficiency of business processes; and optimizing costs
and operational excellence.
59

60
Baltika Breweries | Annual report 2010
Charter Capital
The Company’s charter capital totals RUB 164,041,164. No changes
in charter capital were carried out in 2010.
Share Issues
Issued shares
Share type
Registered
ordinary
Type “A” registered
preference
Charter Capital Distribution
Baltic Beverages Holding AB
Physical Persons
Custodians
Legal entities
State
registration
number
Charter Capital Structure as of December 31 st , 2010
Number of shares
issued
Nominal value of the issue,
RUB
1-04-00265-А 151,714,594 151,714,594
2-04-00256-А 12,326,570 12,326,570
The Company’s majority shareholder is Baltic Beverages Holding АВ,
a subsidiary of Carlsberg Breweries A/S. Baltic Beverages Holding AB
holds 89.01 % of the Company’s total shares. In 2010, the charter capital
structure remained virtually the same.
As of December 31 st , 2010, the total number of registered shareholders
stood at 2,670, including 28 legal entities, of which 9 are custodians, and
2,642 physical persons.
2.76 %
8.09 % 0.14 %
89.01 %

Securities
Shares in Circulation
The Company’s shares are traded
on two domestic stock exchanges:
the RTS Stock Exchange (since
2001) and the MICEX Stock
Exchange (since 2003).
As the most liquid share
in the consumer goods sector,
the Company’s shares are used
to calculate the corresponding
industry index of MICEX Stock
Exchange (MICEX CGS).
The Company is the leader
in market capitalization
among Russian consumer
goods producers. In 2010, the
Company’s market capitalization
increased 1.8 times to reach
RUB 248 billion (based on MICEX
data) or USD 8 billion (according
to RTS data) by year end.
Tickers
Baltika capitalization dynamics versus MICEX indices in 2010
%
Company capitalization +77 %
MICEX index +23 %
MICEX Consumer Sector index +85 %
Ordinary shares РКВА
Type “A” preference shares РКВАP
In H1 2010, the Company’s shares followed general stock
market trends, which was affected by the debts of Euro
Zone countries. Beginning from H2, the upward trend
grew and the market trended higher at the end of the year.
By year end, Russian stock exchanges indices grew 23 %
(MICEX) and 22.5 % (RTS), led by higher share prices for
consumer sector companies. The MICEX consumer sector
index grew by 85 % by year end.
The value of the Company’s shares increased due to the
general market upswing, which resulted in growing
investor interest, including from western investors, in the
consumer sector.
January February March April May June July August September October November December
Company capitalization
MICEX index
MICEX Consumer Sector index
61

62
Baltika Breweries | Annual report 2010
Statistics concerning trading in the Company’s shares
Minimum price per
share during the year,
RUB
Maximum price per
share during the year,
RUB
Price of last transaction,
RUB*
2009 2010 2009 2010 2009 2010
Ordinary shares 349 775 850 1,558.47 850 1,527.85
Type “A” preference
shares
* Price of last transactions on 31.12.2009 and 30.12.2010
305 781 880 1,319.90 880 1,319.90
The above statistics are based on MICEX Stock Exchange data,
since this is the primary trading floor for transactions with the
Company’s shares.
Compared with 2009, the price for the Company’s shares grew
during the reporting year; the price of ordinary and preference
shares increased by 80 % and 50 % respectively.
The liquidity of the Company’s shares also grew in 2010, with
transaction volume of preference shares increasing nearly three
times compared with 2009, while the same indicator for ordinary
shares grew 1.7 times. In monetary terms, the total share trading
volume increased by 68 % compared with 2009.
Number of transactions (based on MICEX data)
Ordinary shares
2009 14,727
2010
Preference shares
2009 6,154
2010 18,322
Share trading volume, RUB million (based on MICEX data)
2009
2010
2009
2010
Ordinary shares
Preference shares
185
368
376
576
25,525

Securities
Dividend Policy
The Company’s dividend policy is based on fairly distributing profits
among shareholders in proportion to the number of shares owned. The
policy also takes into account the rational balance between dividends
and funds required to implement the Company’s strategic development
plans.
Dividends paid per Company share, 2005–2009
Dividend payment period Dividend per share, RUB
Dynamics for dividends
per share,
% compared with 2005
2005 24.33
2006 39.50 162
2007 52.00 214
2008 85.10 350
2009 128.00 526
63

oAo baltika breweries
and subsidiaries
CoNSoLIDATED
fINANCIAL
STATEMENTS
for the year ended
31 December 2010

Contents
Independent Auditors’ Report .................................. 66
Consolidated Statement of Financial Position ...................... 67
Consolidated Statement of Comprehensive Income ................. 69
Consolidated Statement of Changes in Equity ..................... 70
Consolidated Statement of Cash Flows .......................... 71
Notes to the Consolidated Financial Statements .................... 72
65

66
The Management
OAO Baltika Breweries
Independent Auditors’ Report
We have audited the accompanying consolidated financial statements of OAO Baltika Breweries (the “Company”) and
its subsidiaries (the “Group”), which comprise the consolidated statement of financial position as at 31 December 2010,
and the consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended,
and notes comprising a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements
in accordance with International Financial Reporting Standards, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted
our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material
misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments,
we consider internal control relevant to the entity’s preparation and fair presentation of the consolidated financial
statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made by management,
as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position
of the Group as at 31 December 2010, and of its financial performance and its cash flows for the year then ended
in accordance with International Financial Reporting Standards.
ZAO KPMG
18 February 2011
ZAO KPMG
“Renaissance Plaza” Business
Center,
69–71 A, Ul. Marata, St. Petersburg,
Russia 191119
ZAO KPMG, a company incorporated under the Laws of the
Russian Federation, a subsidiary of KPMG Europe LLP, and a member firm
of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Telephone +7 (812) 313 7300
Fax +7 (812) 313 7301
Internet www.kpmg.ru

Consolidated Statement of Financial Position as at 31 December 2010
’000 RUB Note 2010 2009
ASSETS
Non-current assets
Property, plant and equipment 12 39,078,860 42,177,090
Intangible assets 13 14,255,934 14,001,800
Investments in equity accounted investees 14 215,186 293,183
Other investments 15 87,251 9,781
Total non-current assets 53,637,231 56,481,854
Current assets
Inventories 17 5,781,434 4,296,053
Other investments 15 3,895,312 9,051,299
Income tax receivable 98,573 6,566
Trade and other receivables 18 6,660,671 8,062,093
Cash and cash equivalents 19 566,986 1,740,702
Total current assets 17,002,976 23,156,713
Total assets 70,640,207 79,638,567
The consolidated statement of financial position is to be read in conjunction with the notes to, and forming part of, the
consolidated financial statements set out on pages 72 to 94.
67

68
Consolidated Statement of Financial Position as at 31 December 2010
’000 RUB Note 2010 2009
EQUITY AND LIABILITIES
Equity
Preference shares 84,978 84,978
Ordinary shares 736,129 736,129
Share capital 821,107 821,107
Share premium 4,171,716 4,171,716
Foreign currency translation reserve 753,745 691,405
Retained earnings 49,281,269 57,997,085
Total equity 55,027,837 63,681,313
Non-current liabilities
Deferred tax liabilities 16 1,943,118 1,631,672
Total non-current liabilities 1,943,118 1,631,672
Current liabilities
Loans and borrowings 22 — 181,572
Trade and other payables 23 13,258,512 13,398,581
Deferred income 284,895 129,057
Income tax payable 125,845 616,372
Total current liabilities 13,669,252 14,325,582
Total liabilities 15,612,370 15,957,254
Total equity and liabilities 70,640,207 79,638,567
The consolidated statement of financial position is to be read in conjunction with the notes to, and forming part of, the
consolidated financial statements set out on pages 72 to 94.

Consolidated Statement of Comprehensive Income for the year ended 31 December 2010
’000 RUB Note 2010 2009
Revenue 79,306,979 93,720,164
Cost of sales (34,161,877) (42,466,337)
Gross profit 45,145,102 51,253,827
Other income 6 75,551 72,217
Distribution expenses (18,551,647) (19,150,073)
Administrative expenses 7 (2,429,000) (2,528,721)
Other expenses 8 (551,231) —
Results from operating activities 23,688,775 29,647,250
Finance income 10 1,269,192 1,834,591
Finance costs 10 (712,991) (2,349,918)
Net finance costs 556,201 (515.327)
Share of loss of equity accounted investees (net of income tax) (57,629) (29,734)
Profit before income tax 24,187,347 29,102,189
Income tax expense 11 (5,016,165) (5,729,920)
Profit for the year 19,171,182 23,372,269
Other comprehensive income
Foreign currency translation differences for foreign operations 62,340 257,818
Total comprehensive income for the year 19,233,522 23,630,087
Earnings per share
Basic and diluted earnings per share 21 112.55 RUB 147.14 RUB
These consolidated financial statements were approved by management on 18 February 2011
and were signed on its behalf by:
Anton Artemiev
President
Ekaterina Azimina
Vice-President of finance and economy
The consolidated statement of comprehensive income is to be read in conjunction with the notes to, and forming part of, the
consolidated financial statements set out on pages 72 to 94.
69

70
Consolidated Statement of Changes in Equity for the year ended 31 December 2010
’000 RUB
Preference
shares
Ordinary
shares
Share
premium
Foreign
currency
translation
reserve
Retained
earnings
Balance at 1 January 2009 84,978 736,129 4,171,716 433,587 48,584,719 54,011,129
Total comprehensive income for the year
Profit for the year — — — — 23,372,269 23,372,269
Other comprehensive income
Foreign currency translation differences — — — 257,818 — 257,818
Total other comprehensive income — — — 257,818 — 257,818
Total comprehensive income for the year — — — 257,818 23,372,269 23,630,087
Transactions with owners, recorded directly in equity
Dividends to equity holders — — — — (13,959,903) (13,959,903)
Total transactions with owners — — — — (13,959,903) (13,959,903)
Balance at 31 December 2009 84,978 736,129 4,171,716 691,405 57,997,085 63,681,313
’000 RUB
Preference
shares
Ordinary
shares
Share
premium
Foreign
currency
translation
reserve
Retained
earnings
Balance at 1 January 2010 84,978 736,129 4,171,716 691,405 57,997,085 63,681,313
Total comprehensive income for the year
Profit for the year — — — — 19,171,182 19,171,182
Other comprehensive income
Foreign currency translation differences — — — 62,340 — 62,340
Total other comprehensive income — — — 62,340 — 62,340
Total comprehensive income for the year — — — 62,340 19,171,182 19,233,522
Transactions with owners, recorded directly in equity
Dividends to equity holders — — — — (27,886,998) (27,886,998)
Total transactions with owners — — — — (27,886,998) (27,886,998)
Balance at 31 December 2010 84,978 736,129 4,171,716 753,745 49,281,269 55,027,837
The consolidated statement of changes in equity is to be read in conjunction with the notes to, and forming part of, the
consolidated financial statements set out on pages 72 to 94.
Total
Total

Consolidated Statement of Cash Flows for the year ended 31 December 2010
’000 RUB Note 2010 2009
OPERATING ACTIVITIES
Profit for the year 19,171,182 23,372,269
Adjustments for:
Depreciation 12 4,777,578 4,447,579
Amortisation 13 227,831 196,730
Impairment losses on property, plant and equipment 8 550,248 —
Gain on disposal of property, plant and equipment and intangible assets 6 (72,902) (72,217)
Share of loss of equity accounted investees (net of income tax) 14 57,629 29,734
Gain on disposal of subsidiary 6 (2,568) —
Interest expense 10 1,025 190,319
Interest income 10 (543,396) (466,342)
Income tax expense 11 5,016,165 5,729,920
Operating profit before changes in working capital and provisions 29,182,792 33,427,992
Change in inventories (1,308,974) 3,221,273
Change in trade and other receivables 1,401,422 (551,052)
Change in trade and other payables (158,470) 2,621,163
Cash flows from operations before income taxes and interest paid 29,116,770 38,719,376
Income taxes paid (5,287,253) (4,688,122)
Interest paid (1,110) (261,011)
Cash flows from operating activities 23,828,407 33,770,243
INVESTING ACTIVITIES
Proceeds from disposal of property, plant and equipment and intangible assets 217,205 95,898
Disposal of subsidiary, net of cash disposed of 4,160 —
Interest received 521,229 386,600
Dividends received — 27,300
Acquisition of property, plant and equipment and intangible assets (3,045,724) (3,818,693)
Sales of investment securities — 15
Repayment of- / (origination of) loans to related parties 1,689,360 (2,189,360)
Acquisition of investments — (6,782,197)
Proceeds from disposal of investments 3,488,794 —
Cash flows from /(used in) investing activities 2,875,024 (12,280,437)
FINANCING ACTIVITIES
Proceeds from borrowings — 52,172
Repayment of borrowings (181,487) (7,539,049)
Dividends paid (27,695,522) (13,979,751)
Cash flows used in financing activities (27,877,009) (21,466,628)
Net (decrease) /increase in cash and cash equivalents (1,173,578) 23,178
Cash and cash equivalents at 1 January 1,740,702 1,691,594
Effect of exchange rate fluctuations on cash and cash equivalents (138) 25,930
Cash and cash equivalents at 31 December 19 566,986 1,740,702
The consolidated statement of cash flows is to be read in conjunction with the notes to, and forming part of, the consolidated
financial statements set out on pages 72 to 94.
71

72
OAO Baltika Breweries and subsidiaries
Notes to the Consolidated Financial Statements for the year ended 31 December 2010
1. Background
(a) Russian business environment
The Group’s operations are primarily located in the Russian Federation.
Consequently, the Group is exposed to the economic and financial
markets of the Russian Federation which display characteristics
of an emerging market. The legal, tax and regulatory frameworks
continue development, but are subject to varying interpretations
and frequent changes which together with other legal and fiscal
impediments contribute to the challenges faced by entities operating
in the Russian Federation. The consolidated financial statements reflect
management’s assessment of the impact of the Russian business
environment on the operations and the financial position of the Group.
The future business environment may differ from management’s
assessment.
(b) Organisation and operations
OAO Baltika Breweries (the “Company”) is an open joint stock
company as defined by the Civil Code of the Russian Federation and
was registered on 21 July 1992, and, through a controlling interest
in eight companies and ten branches (together referred to as the
“Group”), produces and distributes beer, soft drinks and mineral water.
2. Basis of preparation
(a) Statement of compliance
These consolidated financial statements have been prepared
in accordance with International Financial Reporting Standard (“IFRSs”).
(b) Basis of measurement
The consolidated financial statements are prepared on the historical
cost basis except that property, plant and equipment was revalued
to determine deemed cost as part of the adoption of IFRSs;
and the carrying amounts of assets, liabilities and equity items
in existence at 31 December 2002 include adjustments for the effects
of hyperinflation, which were calculated using conversion factors
derived from the Russian Federation Consumer Price Index published
by the Russian Statistics Agency, GosKomStat. Russia ceased to be
hyperinflationary for IFRS purposes as at 1 January 2003.
(c) Functional and presentation currency
The national currency of the Russian Federation is the Russian Rouble
(“RUB”), which is the Company’s functional currency, the functional
currency of the majority of the Company’s subsidiaries and the currency
in which these consolidated financial statements are presented. All
financial information presented in RUB has been rounded to the nearest
thousand.
The Company’s registered office is situated at 6 Verkhny pereulok, 3,
St. Petersburg, 194292, Russia.
As at 31 December 2010 Baltic Beverages Holding AB owned and
controlled 93.65 % of the Company’s ordinary shares and 31.9 % of the
Company’s preference shares. The remainder of the ordinary and
preference shares are widely held.
As at 31 December 2010 the Group consisted of twelve production
plants: Baltika-Saint-Petersburg, Baltika-Tula, Baltika-Rostov, Baltika-
Samara, Baltika-Khabarovsk, Baltika-Vena, Baltika-Chelyabinsk,
Baltika-Pikra, Baltika-Yaroslavl, Baltika-Voronezh, Baltika-Novosibirsk
and Baltika-Baku and eight subsidiaries: OOO Terminal Podolsk,
OOO Baltika-Ukraine, OOO Baltika, Baltika S.R.L., OOO Baltika-Bel,
Baltika Deutschland GmbH, LLC Baltika-Baku and OJSC Baku-Pivo.
In November 2010 the Group sold 3 % of the shares
of OOO Universalopttorg to a third party. In December 2010, it sold the
remaining shares to the same third party. The sale of the subsidiary did
not have a significant effect on the Group’s operations.
Most of the Group’s customers are located in Russia. The Group’s
raw materials are readily available and the Group is not dependent on
a single supplier or only a few suppliers.
Related party transactions are detailed in note 28.
(d) Use of judgements, estimates and assumptions
The preparation of consolidated financial statements in conformity
with IFRSs requires management to make judgments, estimates and
assumptions that affect the application of accounting policies and the
reported amounts of assets, liabilities, income and expenses. Actual
results may differ from those estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the period
in which the estimates are revised and in any future periods affected.
Information about critical judgments in applying accounting policies
that have the most significant effect on the amounts recognised in the
consolidated financial statements is included in the following notes:
Note 13 — Intangible assets;
Note 17 — Inventories; and
Note 18 — Trade and other receivables

Notes to the Consolidated Financial Statements for the year ended 31 December 2010
(e) Changes in accounting policies and presentation
With effect from 1 January 2010, the Group changed its accounting
policies in the following areas:
accounting for business combinations
accounting for leases of land
distribution of non-cash assets to owners of the Group
(i) Accounting for business combinations
From 1 January 2010 the Group has applied IFRS 3 Business
Combinations (2008) in accounting for business combinations. The
change in accounting policy has been applied prospectively and has had
no material impact on earnings per share.
Business combinations are accounted for using the acquisition
method as at the acquisition date, which is the date on which control
is transferred to the Group. Control is the power to govern the financial
and operating policies of an entity so as to obtain benefits from its
activities. In assessing control, the Group takes into consideration
potential voting rights that currently are exercisable.
Acquisitions on or after 1 January 2010
For acquisitions on or after 1 January 2010, the Group measures
goodwill at the acquisition date as:
the fair value of the consideration transferred; plus
the recognised amount of any non-controlling interests in the
acquiree; plus, if the business combination is achieved in stages,
the fair value of the existing equity interest in the acquiree; less
the net recognised amount (generally fair value) of the identifiable
assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised
immediately in profit or loss.
The consideration transferred does not include amounts related to the
settlement of pre-existing relationships. Such amounts are generally
recognised in profit or loss.
3. Significant accounting policies
The accounting policies set out below have been consistently applied
to all periods presented in these consolidated financial statements, and
have been applied consistently by Group entities, except as explained
in note 2(e), which addresses changes in accounting policies.
Certain comparative amounts have been reclassified to conform with
the current year’s presentation in the amount of RUB 71,417 thousand
resulting in an increase of revenue and an increase of cost of sales for
the same amount.
Management believes that such presentation is more appropriate.
(a) Basis of consolidation
(i) Business combinations
The Group has changed its accounting policy with respect to accounting
for business combinations. See note 2(e)(i) for further details.
Costs related to the acquisition, other than those associated with the
issue of debt or equity securities, that the Group incurs in connection
with a business combination, are expensed as incurred.
Any contingent consideration payable is recognised at fair value at the
acquisition date. If the contingent consideration is classified as equity,
it is not remeasured and settlement is accounted for within equity.
Otherwise, subsequent changes to the fair value of the contingent
consideration are recognised in profit or loss.
For the measurement of goodwill prior to 1 January 2010, see note 3(f)
(i).
(ii) Accounting for leases of land
The amendment to IAs 17 Leases regarding the leases of land
became effective from 1 January 2010. The amendment removed
the earlier exemption which allowed leases of land to be classified
as operating leases regardless of the length of the lease term. The
amended guidance requires all existing leases of land to be reassessed
and reclassified if necessary as finance leases if the finance lease
classification criteria are met. At 1 January 2010, the Group reassessed
all existing land lease contracts and as a result it was assessed that
existing land lease contracts do not qualify as finance lease contracts
and, therefore, the classification was not changed (see note 25).
(f) Accounting policies for new transactions and events
Distributions of non-cash assets to owners of the Company
From 1 January 2010 the Group has applied IFRIC 17 Distributions
of Non-cash Assets to Owners in accounting for distributions of non-cash
assets to owners of the Company. The new accounting policy has been
applied prospectively.
The Group measures a liability to distribute non-cash assets as a dividend
to the owners of the Company at the fair value of the assets to be
distributed. The carrying amount of the dividend is remeasured at each
reporting date and at the settlement date, with any changes recognised
directly in equity as adjustments to the amount of the distribution. On
settlement of the transaction, the Group recognises the difference, if any,
between the carrying amount of the assets distributed and the carrying
amount of the liability in profit or loss.
(ii) Subsidiaries
Subsidiaries are entities controlled by the Group. The financial
statements of subsidiaries are included in the consolidated financial
statements from the date that control commences until the date that
control ceases. The accounting policies of subsidiaries have been
changed when necessary to align them with the policies adopted by the
Group. Losses applicable to the non-controlling interests in a subsidiary
are allocated to the non-controlling interests even if doing so causes the
non-controlling interests to have a deficit balance.
(iii) Loss of control
Upon the loss of control, the Group derecognises the assets and
liabilities of the subsidiary, any non-controlling interests and the other
components of equity related to the subsidiary. Any surplus or deficit
arising on the loss of control is recognised in profit or loss. If the Group
retains any interest in the previous subsidiary, then such interest
is measured at fair value at the date that control is loSt. Subsequently it
73

74
OAO Baltika Breweries and subsidiaries
is accounted for as an equity-accounted investee or as an available-forsale
financial asset depending on the level of influence retained.
(iv) Investments in associates (equity accounted investees)
Associates are those entities in which the Group has significant
influence, but not control, over the financial and operating policies.
Significant influence is presumed to exist when the Group holds between
20 % and 50 % of the voting power of another entity. Joint ventures
are those entities over whose activities the Group has joint control,
established by contractual agreement and requiring unanimous consent
for strategic financial and operating decisions.
Investments in associates are accounted for using the equity method
and are recognised initially at coSt. The cost of the investment includes
transaction costs.
The consolidated financial statements include the Group’s share of the
income and expenses and equity movements of equity accounted
investees, after adjustments to align the accounting policies with those
of the Group, from the date that significant influence commences until
the date that significant influence ceases.
When the Group’s share of losses exceeds its interest in an equity
accounted investee, the carrying amount of that interest including
any long-term investments is reduced to zero and the recognition
of further losses is discontinued, except to the extent that the Group
has an obligation or has made payments on behalf of the investee.
(v) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income
and expenses arising from intra-group transactions, are eliminated
in preparing the consolidated financial statements. Unrealised
gains arising from transactions with equity-accounted investees are
eliminated against the investment to the extent of the Group’s interest
in the investee. Unrealised losses are eliminated in the same way
as unrealised gains, but only to the extent that there is no evidence
of impairment.
(b) Foreign currencies
(i) Foreign currency transactions
Transactions in foreign currencies are translated to the respective
functional currencies of Group entities at exchange rates at the dates
of the transactions. Monetary assets and liabilities denominated
in foreign currencies at the reporting date are retranslated to the
functional currency at the exchange rate at that date. The foreign
currency gain or loss on monetary items is the difference between
amortised cost in the functional currency at the beginning of the period,
adjusted for effective interest and payments during the period, and the
amortised cost in foreign currency translated at the exchange rate at the
end of the reporting period.
Non-monetary assets and liabilities denominated in foreign
currencies that are measured at fair value are retranslated to the
functional currency at the exchange rate at the date that the fair value
was determined. Non-monetary items in a foreign currency that are
measured in terms of historical cost are translated using the exchange
rate at the date of the transaction. Foreign currency differences arising
in retranslation are recognised in profit or loss, except for differences
arising on the retranslation of available-for-sale equity instruments which
are recognised in other comprehensive income.
(ii) Foreign operations
The assets and liabilities of foreign operations, including goodwill and
fair value adjustments arising on acquisition, are translated to RUB
at the exchange rate at the reporting date. The income and expenses
of foreign operations are translated to RUB at exchange rates at the
dates of the transactions.
Foreign currency differences are recognised in other comprehensive
income. Since 1 January 2004, the Group’s date of transition to IFRSs,
such differences have been recognised in the foreign currency
translation reserve in equity. However, if the operation is a non-
wholly-owned subsidiary, then the relevant proportionate share of the
translation difference is allocated to the non-controlling interests. When
a foreign operation is disposed of such that control, significant influence
or joint control is lost, the cumulative amount in the translation reserve
related to that foreign operation is reclassified to profit or loss as part
of the gain or loss on disposal. When the Group disposes of only part
of its interest in a subsidiary that includes a foreign operation while
retaining control, the relevant proportion of the cumulative amount
is reattributed to non-controlling interests. When the Group disposes
of only part of its investment in an associate or joint venture that
includes a foreign operation while retaining significant influence or joint
control, the relevant proportion of the cumulative amount is reclassified
to profit or loss.
When the settlement of a monetary item receivable from or payable
to a foreign operation is neither planned nor likely in the foreseeable
future, foreign exchange gains and losses arising from such a monetary
item are considered to form part of a net investment in a foreign
operation and are recognised in other comprehensive income, and
presented in the translation reserve in equity.
(c) Financial instruments
(i) Non-derivative financial instruments
Non-derivative financial instruments comprise investments in equity
securities, trade and other receivables, cash and cash equivalents,
loans and borrowings, and trade and other payables.
The Group initially recognises loans and receivables and deposits on the
date that they are originated. All other financial assets are recognised
initially on the trade date at which the Group becomes a party to the
contractual provisions of the instrument.
The Group derecognises a financial asset when the contractual
rights to the cash flows from the asset expire, or it transfers the
rights to receive the contractual cash flows on the financial asset
in a transaction in which substantially all the risks and rewards
of ownership of the financial asset are transferred. Any interest
in transferred financial assets that is created or retained by the Group
is recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented
in the statement of financial position when, and only when, the Group
has a legal right to offset the amounts and intends either to settle on
a net basis or to realise the asset and settle the liability simultaneously.
The Group classifies non-derivative financial assets into the following
categories: loans and receivables and available-for-sale financial assets.
Loans and receivables
Loans and receivables are a category of financial assets with fixed
or determinable payments that are not quoted in an active market.
Such assets are recognised initially at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition loans and
receivables are measured at amortised cost using the effective interest
method, less any impairment losses. Loans and receivables comprise
the following classes of assets: loans and receivables as presented
in note 15 and trade and other receivables as presented in note 18.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances, deposits and
highly liquid investments with maturities at initial recognition of three
months or less.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets
that are designated as available-for-sale or are not classified in any
of the above categories of financial assets. Such assets are recognised
initially at fair value plus any directly attributable transaction costs.
Subsequent to initial recognition, they are measured at fair value and
changes therein, other than impairment losses (see note 3(i)(i)) and
foreign currency differences on available-for-sale debt instruments
(see note 3(b)(i)), are recognised in other comprehensive income and

Notes to the Consolidated Financial Statements for the year ended 31 December 2010
presented within equity in the fair value reserve. When an investment
is derecognised or impaired, the cumulative gain or loss in equity
is transferred to profit or loss. Unquoted equity instruments whose fair
value cannot reliably be measured are carried at coSt.
Available-for-sale financial assets comprise equity securities.
(ii) Non-derivative financial liabilities
The Group initially recognises debt securities issued and subordinated
liabilities on the date that they are originated. All other financial liabilities
are recognised initially on the trade date at which the Group becomes
a party to the contractual provisions of the instrument.
The Group derecognises a financial liability when its contractual
obligations are discharged or cancelled or expire.
Financial assets and liabilities are offset and the net amount presented
in the statement of financial position when, and only when, the Group
has a legal right to offset the amounts and intends either to settle on
a net basis or to realise the asset and settle the liability simultaneously.
The Group classifies non-derivative financial liabilities into the other
financial liabilities category. Such financial liabilities are recognised
initially at fair value less any directly attributable transaction costs.
Subsequent to initial recognition these financial liabilities are measured
at amortised cost using the effective interest method.
Other financial liabilities comprise loans and borrowings and trade and
other payables.
(d) Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly
attributable to issue of ordinary shares and share options are recognised
as a deduction from equity, net of any tax effects.
Preference share capital
Preference share capital is classified as equity if it is non-redeemable,
or redeemable only at the Company’s option, and any dividends
are discretionary. Dividends thereon are recognised as distributions
within equity upon approval by the Company’s shareholders.
Repurchase, disposal and reissue of share capital (treasury shares)
When share capital recognised as equity is repurchased, the amount
of the consideration paid, which includes directly attributable costs,
is net of any tax effects, and is recognised as a deduction from
equity. Repurchased shares are classified as treasury shares and
are presented in the reserve for own shares. When treasury shares
are sold or reissued subsequently, the amount received is recognized
as an increase in equity, and the resulting surplus or deficit on the
transaction is presented in share premium.
(e) Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment, except for land, are measured
at cost less accumulated depreciation and impairment losses. The
cost of property, plant and equipment at 1 January 2004, the date
of transition to IFRSs, was determined by reference to its fair value at
that date.
Cost includes expenditures that are directly attributable to the acquisition
of the asset. The cost of self-constructed assets includes the cost
of materials and direct labour, any other costs directly attributable
to bringing the asset to a working condition for its intended use, and the
costs of dismantling and removing the items and restoring the site on
which they are located, and capitalised borrowing costs. Cost also may
include transfers from equity of any gain or loss on qualifying cash flow
hedges of foreign currency purchases of property, plant and equipment.
Purchased software that is integral to the functionality of the related
equipment is capitalised as part of that equipment.
When parts of an item of property, plant and equipment have
different useful lives, they are accounted for as separate items (major
components) of property, plant and equipment.
The gain or loss on disposal of an item of property, plant and equipment
is determined by comparing the proceeds from disposal with the
carrying amount of property, plant and equipment, and is recognised net
within other income/other expenses in profit or loss.
(ii) Subsequent costs
The cost of replacing a component of an item of property, plant
and equipment is recognised in the carrying amount of the item if it
is probable that the future economic benefits embodied within the
component will flow to the Group and its cost can be measured reliably.
The carrying amount of the replaced component is derecognized. The
costs of the day-to-day servicing of property, plant and equipment are
recognised in profit or loss as incurred.
(iii) Depreciation
Depreciation is based on the cost of an asset less its residual value.
Significant components of individual assets are assessed and if
a component has a useful life that is different from the remainder of that
asset, that component is depreciated separately.
Depreciation is recognised in profit or loss on a straight-line basis over
the estimated useful lives of each part of an item of property, plant
and equipment, since this most closely reflects the expected pattern
of consumption of the future economic benefits embodied in the asset.
Leased assets are depreciated over the shorter of the lease term and
their useful lives unless it is reasonably certain that the Group will
obtain ownership by the end of the lease term. Land is not depreciated.
The estimated useful lives for the current and comparative periods are
as follows:
Buildings 20–40 years
Machinery and equipment 3–20 years
Kegs 10 years
Depreciation methods, useful lives and residual values are reviewed at
each financial year end and adjusted if appropriate.
(f) Intangible assets
(i) Goodwill
Goodwill (negative goodwill) that arises on the acquisition of subsidiaries
is included in intangible assets. For the measurement of goodwill at
initial recognition, see note 2(e)(i).
Acquisitions prior to 1 January 2004
As part of its transition to IFRSs, the Group elected to restate only
those business combinations that occurred on or after 1 January 2004.
In respect of acquisitions prior to 1 January 2004, goodwill represents
the difference between the Company’s interest in a subsidiary’s net
identifiable assets on the date of transition and the cost of that interest.
Acquisitions between 1 January 2004 and 1 January 2010
For acquisitions between 1 January 2004 and 1 January 2010, goodwill
represents the excess of the cost of the acquisition over the Group’s
interest in the net fair value of the identifiable assets, liabilities and
contingent liabilities of the acquiree. When the excess is negative
(negative goodwill), it is recognised immediately in profit or loss.
Subsequent measurement
Goodwill is measured at cost less accumulated impairment losses.
In respect of equity accounted investees, the carrying amount
of goodwill is included in the carrying amount of the investment, and
an impairment loss on such an investment is not allocated to any asset,
including goodwill, that forms part of the carrying amount of the equityaccounted
investee.
75

76
OAO Baltika Breweries and subsidiaries
(ii) Other intangible assets
Other intangible assets that are acquired by the Group, which have finite
useful lives, are measured at cost less accumulated amortisation and
accumulated impairment losses.
(iii) Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future
economic benefits embodied in the specific asset to which it relates. All
other expenditure, including expenditure on internally generated goodwill
and brands is recognised in profit or loss as incurred.
(iv) Amortisation
Amortisation is calculated over the cost of the asset, or other amount
substituted for cost, less its residual value.
Amortisation is recognised in profit or loss on a straight-line basis over
the estimated useful lives of intangible assets, other than goodwill,
from the date that they are available for use since this most closely
reflects the expected pattern of consumption of future economic benefits
embodied in the asset. The estimated useful lives of other intangible
assets, which comprise trademarks, software and licences, for the
current and comparative periods vary from between 1 and 10 years.
Amortisation methods, useful lives and residual values are reviewed at
each financial year end and adjusted if appropriate.
(g) Leased assets
Leases in terms of which the Group assumes substantially all the risks
and rewards of ownership are classified as finance leases. Upon initial
recognition the leased asset is measured at an amount equal to the
lower of its fair value and the present value of the minimum lease
payments. Subsequent to initial recognition, the asset is accounted for
in accordance with the accounting policy applicable to that asset.
Other leases are operating leases and the leased assets are not
recognised on the Group’s statement of financial position.
(h) Inventories
Inventories are measured at the lower of cost and net realisable value.
The cost of inventories is based on the weighted average principle and
includes expenditure incurred in acquiring the inventories, production
or conversion costs and other costs incurred in bringing them to their
existing location and condition. In the case of manufactured inventories
and work in progress, cost includes an appropriate share of overheads
based on normal operating capacity.
Net realisable value is the estimated selling price in the ordinary
course of business, less the estimated costs of completion and selling
expenses.
(i) Impairment
(i) Non-derivative financial assets
A financial asset not carried at fair value through profit or loss is assessed
at each reporting date to determine whether there is any objective
evidence that it is impaired. A financial asset is impaired if objective
evidence indicates that a loss event has occurred after the initial recognition
of the asset, and that the loss event had a negative effect on the
estimated future cash flows of that asset that can be estimated reliably.
Objective evidence that financial assets (including equity securities) are
impaired can include default or delinquency by a debtor, restructuring
of an amount due to the Group on terms that the Group would not
consider otherwise, indications that a debtor or issuer will enter
bankruptcy, adverse changes in the payment status of borrowers or
issuers in the Group, economic conditions that correlate with defaults
or the disappearance of an active market for a security. In addition, for
an investment in an equity security, a significant or prolonged decline
in its fair value below its cost is objective evidence of impairment.
Loans and receivables
The Group considers evidence of impairment for loans and receivables
at both a specific asset and collective level. All individually significant
loans and receivables are assessed for specific impairment. All
individually significant loans and receivables found not to be specifically
impaired are then collectively assessed for any impairment that
has been incurred but not yet identified. Loans and receivables that are
not individually significant are collectively assessed for impairment by
grouping together loans and receivables with similar risk characteristics.
In assessing collective impairment the Group uses historical trends
of the probability of default, timing of recoveries and the amount of loss
incurred, adjusted for management’s judgement as to whether current
economic and credit conditions are such that the actual losses are likely
to be greater or less than suggested by historical trends.
An impairment loss in respect of a financial asset measured at amortised
cost is calculated as the difference between its carrying amount, and
the present value of the estimated future cash flows discounted at the
asset’s original effective interest rate. Losses are recognised in profit
or loss and reflected in an allowance account against receivables.
Interest on the impaired asset continues to be recognised through
the unwinding of the discount. When a subsequent event causes the
amount of impairment loss to decrease, the decrease in impairment loss
is reversed through profit or loss.
Available-for-sale financial assets
Impairment losses on available-for-sale investment securities are
recognised by reclassifying the losses accumulated in the fair value
reserve in equity, to profit or loss. The cumulative loss that is reclassified
from equity to profit or loss is the difference between the acquisition
cost, net of any principal repayment and amortisation, and the current
fair value, less any impairment loss previously recognised in profit
or loss. Changes in impairment provisions attributable to application
of the effective interest method are reflected as a component of interest
income. If, in a subsequent period, the fair value of an impaired
available-for-sale debt security increases and the increase can be
related objectively to an event occurring after the impairment loss
was recognised in profit or loss, then the impairment loss is reversed,
with the amount of the reversal recognised in profit or loss. However,
any subsequent recovery in the fair value of an impaired available-forsale
equity security is recognised in other comprehensive income.
(ii) Non-financial assets
The carrying amounts of the Group’s non-financial assets, other
than inventories and deferred tax assets are reviewed at each reporting
date to determine whether there is any indication of impairment. If any
such indication exists, then the asset’s recoverable amount is estimated.
For goodwill and intangible assets that have indefinite lives or that are
not yet available for use, the recoverable amount is estimated each
year at the same time. An impairment loss is recognised if the carrying
amount of an asset or its related cash-generating unit (CGU) exceeds its
estimated recoverable amount.
The recoverable amount of an asset or CGU is the greater of its value
in use and its fair value less costs to sell. In assessing value in use,
the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset or CGU.
For the purpose of impairment testing, assets that cannot be tested
individually are grouped together into the smallest group of assets that
generates cash inflows from continuing use that are largely independent
of the cash inflows of other assets or groups of assets or CGU. Subject
to an operating segment ceiling test, for the purposes of goodwill
impairment testing, CGUs to which goodwill has been allocated are
aggregated so that the level at which impairment testing is performed
reflects the lowest level at which goodwill is monitored for internal
reporting purposes. Goodwill acquired in a business combination
is allocated to groups of CGUs that are expected to benefit from the
synergies of the combination.
The Group’s corporate assets do not generate separate cash inflows
and tested for impairment as part of the testing of the CGU to which the
corporate asset is allocated.

Notes to the Consolidated Financial Statements for the year ended 31 December 2010
Impairment losses are recognised in profit or loss. Impairment losses
recognised in respect of CGUs are allocated first to reduce the carrying
amount of any goodwill allocated to the CGU (group of CGUs), and then
to reduce the carrying amounts of the other assets in the CGU (group
of CGUs) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect
of other assets, impairment losses recognised in prior periods are
assessed at each reporting date for any indications that the loss
has decreased or no longer exists. An impairment loss is reversed
if there has been a change in the estimates used to determine the
recoverable amount. An impairment loss is reversed only to the extent
that the asset’s carrying amount does not exceed the carrying amount
that would have been determined, net of depreciation or amortisation, if
no impairment loss had been recognised.
(j) Employee benefits
(i) Defined contribution plans
A defined contribution plan is a post-employment benefit plan under
which an entity pays fixed contributions into a separate entity and
will have no legal or constructive obligation to pay further amounts.
Obligations for contributions to defined contribution pension plans,
including Russia’s State pension fund, are recognised as an employee
benefit expense in profit or loss in the periods during which services
are rendered by employees. Prepaid contributions are recognised
as an asset to the extent that a cash refund or a reduction in future
payments is available. Contributions to a defined contribution plan that
are due more than 12 months after the end of the period in which the
employees render the service are discounted to their present value.
(ii) Short-term benefits
Short-term employee benefit obligations are measured on
an undiscounted basis and are expensed as the related service
is provided. A liability is recognised for the amount expected to be
paid under short-term cash bonus or profit-sharing plans if the Group
has a present legal or constructive obligation to pay this amount
as a result of past service provided by the employee, and the obligation
can be estimated reliably.
(k) Provisions
A provision is recognised if, as a result of a past event, the Group
has a present legal or constructive obligation that can be estimated
reliably, and it is probable that an outflow of economic benefits will
be required to settle the obligation. Provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money and the risks
specific to the liability. The unwinding of the discount is recognised
as finance cost.
(l) Revenue
Revenue from the sale of goods in the course of ordinary activities
is measured at the fair value of the consideration received or receivable,
net of returns, excise taxes, trade discounts and volume rebates.
Revenue is recognised when persuasive evidence exists, usually in the
form of an executed sales agreement, that the significant risks and
rewards of ownership have been transferred to the buyer, recovery
of the consideration is probable, the associated costs and possible
return of goods can be estimated reliably, and there is no continuing
management involvement with the goods, and the amount of revenue
can be measured reliably. If it is probable that discounts will be
granted and the amount can be measured reliably, then the discount
is recognised as a reduction of revenue as the sales are recognised.
The timing of the transfers of risks and rewards varies depending on the
individual terms of the contract of sale. For certain sales, transfer usually
occurs upon dispatch of the products to the customer; for other sales,
transfer occurs upon receipt of the products by the customer.
(m) Other expenses
(i) Lease payments
Payments made under operating leases are recognised in profit or loss
on a straight-line basis over the term of the lease. Lease incentives
received are recognised as an integral part of the total lease expense,
over the term of the lease.
(ii) Social expenditure
To the extent that the Group’s contributions to social programs benefit
the community at large and are not restricted to the Group’s employees,
they are recognised in profit or loss as incurred.
(n) Finance income and finance costs
Finance income comprises interest income on funds invested (including
available-for-sale financial assets), gains on the disposal of availablefor-sale
financial assets and foreign currency gains. Interest income
is recognised as it accrues in profit or loss, using the effective interest
method.
Finance costs comprise interest expense on borrowings and foreign
currency losses.
Borrowing costs that are not directly attributable to the acquisition,
construction or production of a qualifying asset are recognised in profit
or loss using the effective interest method.
Foreign currency gains and losses are reported on a gross basis.
(o) Income tax
Income tax expense comprises current and deferred tax. Current tax and
deferred tax are recognised in profit or loss except to the extent that it
relates to a business combination, or items recognised directly in equity
or in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable
income or loss for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable
in respect of previous years.
Deferred tax is recognised in respect of temporary differences between
the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. Deferred tax
is not recognised for:
temporary differences on the initial recognition of assets or
liabilities in a transaction that is not a business combination and
that affects neither accounting nor taxable profit or loss;
temporary differences related to investments in subsidiaries and
jointly controlled entities to the extent that it is probable that they
will not reverse in the foreseeable future; and
taxable temporary differences arising on the initial recognition
of goodwill.
Deferred tax is measured at the tax rates that are expected to be applied
to the temporary differences when they reverse, based on the laws that
have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally
enforceable right to offset current tax assets and liabilities, and they
relate to income taxes levied by the same tax authority on the same
taxable entity, or on different tax entities, but they intend to settle current
tax liabilities and assets on a net basis or their tax assets and liabilities
will be realised simultaneously.
In accordance with the tax legislation of the Russian Federation, tax
losses and current tax assets of a company in the Group may not be
set off against taxable profits and current tax liabilities of other Group
77

78
OAO Baltika Breweries and subsidiaries
companies. In addition, the tax base is determined separately for each
of the Group’s main activities and, therefore, tax losses and taxable
profits related to different activities cannot be offset.
A deferred tax asset is recognised for unused tax losses, tax credits
and deductible temporary differences, to the extent that it is probable
that future taxable profits will be available against which they can be
utilised. Deferred tax assets are reviewed at each reporting date and are
reduced to the extent that it is no longer probable that the related tax
benefit will be realised.
(p) Earnings per share
The Group presents basic and diluted earnings per share (“EPS”)
data for its ordinary shares. Basic EPS is calculated by dividing the
profit or loss attributable to ordinary shareholders of the Company by
the weighted average number of ordinary shares outstanding during
the period, adjusted for own shares held. Diluted EPS is determined by
adjusting the profit or loss attributable to ordinary shareholders and the
weighted average number of ordinary shares outstanding, adjusted for
own shares held, for the effects of all dilutive potential ordinary shares.
(q) Segment reporting
An operating segment is a component of the Group that engages
in business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to transactions
with any of the Group’s other components. All operating segments’
operating results are reviewed regularly by the Group’s Management
Board to make decisions about resources to be allocated to the segment
and assess its performance, and for which discrete financial information
is available.
Segment results that are reported to the Group’s Management Board
include items directly attributable to a segment.
Segment capital expenditure is the total cost incurred during the year
to acquire property, plant and equipment, and intangible assets other
than goodwill.
(r) New Standards and Interpretations not yet adopted
A number of new Standards, amendments to Standards and
Interpretations are not yet effective as at 31 December 2010, and
have not been applied in preparing these consolidated financial
statements. Of these pronouncements, potentially the following will have
an impact on the Group’s operations. The Group plans to adopt these
pronouncements when they become effective.
Revised IAs 24 Related Party Disclosures (2010) introduces
an exemption from the basic disclosure requirements in relation
to related party disclosures and outstanding balances, including
commitments, for government-related entities. Additionally, the
4. Determination of fair values
A number of the Group’s accounting policies and disclosures require the
determination of fair value, for both financial and non-financial assets
and liabilities. Fair values have been determined for measurement and
disclosure purposes based on the following methods. When applicable,
further information about the assumptions made in determining fair
values is disclosed in the notes specific to that asset or liability.
(a) Property, plant and equipment
The fair value of property, plant and equipment recognised as a result
of a business combination is based on market values. The market
value of property is the estimated amount for which a property could be
exchanged on the date of valuation between a willing buyer and a willing
standard has been revised to simplify some of the presentation
guidance that was previously non-reciprocal. The revised standard
is to be applied retrospectively for annual periods beginning on
or after 1 January 2011. The Group has not yet determined the
potential effect of the revised standard.
Amended IFRS 7 Disclosures — Transfers of Financial Assets
introduces additional disclosure requirements for transfers
of financial assets in situations where assets are not derecognised
in their entirety or where the assets are derecognised in their
entirety but a continuing involvement in the transferred assets
is retained. The new disclosure requirements are designated
to enable the users of financial statements to better understand
the nature of the risks and rewards associated with these assets.
The amendment is effective for annual periods beginning on or
after 1 July 2011. The Group has not yet determined the potential
effect of the amendment.
IFRS 9 Financial Instruments will be effective for annual periods
beginning on or after 1 January 2013. The new standard is to be
issued in phases and is intended ultimately to replace International
Financial Reporting Standard IAs 39 Financial Instruments:
Recognition and Measurement. The first phase of IFRS 9
was issued in November 2009 and relates to the classification
and measurement of financial assets. The second phase
regarding classification and measurement of financial liabilities
was published in October 2010. The remaining parts of the
standard are expected to be issued during the first half of 2011.
The Group recognises that the new standard introduces many
changes to the accounting for financial instruments and is likely
to have a significant impact on Group’s consolidated financial
statements. The impact of these changes will be analysed during
the course of the project as further phases of the standard are
issued. The Group does not intend to adopt this standard early.
IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments
provides guidance on accounting for debt for equity swaps by
the debtor. The interpretation clarifies that an entity’s equity
instruments qualify as “consideration paid” in accordance with
paragraph 41 of International Financial Reporting Standards
IAs 39 Financial Instruments: Recognition and Measurement.
Additionally, the interpretation clarifies how to account for the
initial measurement of own equity instruments issued to extinguish
a financial liability and how to account for the difference between
the carrying amount of the financial liability extinguished and the
initial measurement amount of the equity instruments issued.
IFRIC 19 is applicable for annual periods beginning on or after
1 July 2010.
Various Improvements to IFRSs have been dealt with on a standard-by-standard
basis. All amendments, which result in accounting
changes for presentation, recognition or measurement purposes,
will come into effect not earlier than 1 January 2011. The Group
has not yet analysed the likely impact of the improvements on its
financial position or performance.
seller in an arm’s length transaction after proper marketing wherein the
parties had each acted knowledgeably and willingly. The fair value
of items of plant and equipment is based on market approach and cost
approaches using quoted market prices for similar items when available.
When no quoted market prices are available, the fair value of property,
plant and equipment is primarily determined using depreciated
replacement coSt. This method considers the cost to reproduce or
replace the property, plant and equipment, adjusted for physical,
functional or economical depreciation, and obsolescence.

Notes to the Consolidated Financial Statements for the year ended 31 December 2010
(b) Intangible assets
The fair value of patents and trademarks acquired in a business
combination is based on the discounted estimated royalty payments that
have been avoided as a result of the patent or trademark being owned.
The fair value of other intangible assets is based on the discounted
cash flows expected to be derived from the use and eventual sale of the
assets.
(c) Inventories
The fair value of inventories acquired in a business combination
is determined based on its estimated selling price in the ordinary course
of business less the estimated costs of completion and sale, and
a reasonable profit margin based on the effort required to complete and
sell the inventories.
5. Segment reporting
The Group is engaged in the production and distribution of beer, soft
drinks and mineral water and has identified these operations as a single
reportable segment.
The Group identified the segment in accordance with the criteria set
in IFRS 8 Operating Segments and based on the way the operations
of the Group are regularly reviewed by the chief operating decision
maker to analyze performance and allocate resources within the Group.
The Group’s chief operating decision maker has been determined as the
Management Board.
The segment represents the Group’s business of production
and distribution of beer, soft drinks and mineral water in Russia,
Azerbaijan and other countries. Currently the Group’s operations
in Azerbaijan and other countries make an insignificant contribution
to the financial results of the Group.
Within the segment all business components demonstrate similar
economic characteristics:
the products and customers;
the business processes are integrated and uniform: the Group
manages its operations centrally. Purchasing, logistics, finance,
HR and IT functions are centralized;
the Group’s activities are mainly limited to Russia which
has a uniform regulatory environment.
The Management Board assesses the performance of the operating
segment based on measures for sales, adjusted earnings before
interest, tax, depreciation and amortization (EBITDA), segment assets
and segment liabilities and other information are consistent with that
in the consolidated financial statements.
The accounting policies used for the segment are the same
as accounting policies applied for the consolidated financial statements
as described in note 3.
(d) Equity and debt securities
The fair value of equity securities is determined by reference to their
quoted closing bid price at the reporting date, or if unquoted, determined
using a valuation technique. Valuation techniques employed include
market multiples and discounted cash flow analysis using expected
future cash flows and a market-related discount rate.
(e) Trade and other receivables
The fair value of trade and other receivables is estimated as the present
value of future cash flows, discounted at the market rate of interest at
the reporting date. This fair value is determined for disclosure purposes
or when acquired in a business combination.
(f) Non-derivative financial liabilities
Fair value, which is determined for disclosure purposes, is calculated
based on the present value of future principal and interest cash flows,
discounted at the market rate of interest at the reporting date.
The segment information for the year ended 31 December 2010
is as follows:
’000 RUB 2010 2009
Revenue 79,306,979 93,720,164
EBITDA (including share of loss
of equity accounted investees
(net of income tax) RUB (57,629)
thousand (2009: RUB (29,734)
thousand ))
29,186,803 34,261,825
Segment assets 70,640,207 79,638,567
Investments in equity accounted
investees
215,186 293,183
Capital expenditures 2,604,981 3,421,431
Segment liabilities 15,612,370 15,957,254
A reconciliation of EBITDA to profit for the year is as follows:
’000 RUB 2010 2009
EBITDA (including share of loss
of equity accounted investees (net
of income tax))
Depreciation and amortisation and
impairment losses on property,
plant and equipment
29,186,803 34,261,825
(5,555,657) (4,644,309)
Finance income 1,269,192 1,834,591
Finance costs (712,991) (2,349,918)
Profit before income tax 24,187,347 29,102,189
Income tax (5,016,165) (5,729,920)
Profit for the year 19,171,182 23,372,269
Approximately 17.9 % (2009: 14.9 %) of the Group’s revenue
is attributable to sales transactions with a single customer. Substantially
all of Group’s customers are located in the Russian Federation.
79

80
OAO Baltika Breweries and subsidiaries
6. Other income 7. Administrative expenses
Gain on disposal of property, plant
and equipment and intangible
assets
8. Other expenses
Impairment losses on property,
plant and equipment
2010
’000 RUB
2010
’000 RUB
2009
’000 RUB
72,902 72,217
Gain on disposal of subsidiary 2,568 —
Other income 81 —
75,551 72,217
2009
’000 RUB
(550,248) —
Other expenses (983) —
(551,231) —
9. Personnel costs
2010
’000 RUB
2009
’000 RUB
Wages and salaries 5,800,568 5,976,138
Compulsory social security
contributions
1,030,152 1,029,079
Other payroll expenses 473,818 575,089
Contributions to defined
contribution plan
2010
’000 RUB
2009
’000 RUB
Wages and salaries 819,518 825,486
Depreciation and amortisation 533,724 484,592
Information technology and
communications
Compulsory social security
contributions
145,829 170,580
112,690 105,673
Other payroll expenses 74,450 105,064
Facilities 90,399 94,432
Charity 20,920 35,244
Contributions to defined
contribution plan
11,003 9,989
Other administrative expenses 620,467 697,661
2,429,000 2,528,721
11,003 9989
7,315,541 7,590,295

Notes to the Consolidated Financial Statements for the year ended 31 December 2010
10. Finance income and finance costs
Recognised in profit or loss
2010
’000 RUB
2009
’000 RUB
Foreign exchange gain 725,796 1,368,249
Interest income on bank deposits 406,766 372,086
Interest income on loans and receivables 136,630 94,256
Finance income 1,269,192 1,834,591
Foreign exchange loss (711,966) (2,159,599)
Interest expense on financial liabilities measured at amortised cost (1025) (190,319)
Finance costs recognised in profit or loss (712,991) (2,349,918)
The above financial income and costs include the following in respect of assets/(liabilities) not at
fair value through profit and loss:
Total interest income on financial assets 543,396 466,342
Total interest expense on financial liabilities (1,025) (190,319)
Recognised in other comprehensive income
Foreign currency translation differences for foreign operations 62,340 257,818
Finance income recognised in other comprehensive income, net of tax 62,340 257,818
11. Income tax expense
2010
’000 RUB
2009
’000 RUB
Current tax expense
Current year
Deferred tax expense
4,705,847 5,498,430
Origination and reversal of temporary differences 310,318 231,490
Total income tax expense 5,016,165 5,729,920
The Group’s applicable tax rate is the corporate income tax rate of 20 % for Russian companies (2009: 20 %).
Reconciliation of effective tax rate:
2010
’000 RUB
%
2009
’000 RUB
Profit before income tax 24,187,347 100 29,102,189 100
Income tax at applicable tax rate 4,837,469 20,0 5,820,438 20,0
Non-deductible expenses 361,430 1,5 353,281 1,2
Effects of tax concessions (259,946) (1,1) (496,860) (1,7)
Other 77,212 0,3 53,061 0,2
5,016,165 20,7 5,729,920 19,7
%
81

82
12. Property, plant and equipment
’000 RUB
OAO Baltika Breweries and subsidiaries
Land and
buildings
Machinery
and
equipment
Kegs
Construction
in progress
Cost / Deemed cost
At 1 January 2009 11,756,074 43,770,044 2,280,204 4,896,028 62,702,350
Additions 391,620 2,609,742 — 420,069 3,421,431
Disposals (11,796) (199,545) (19,524) (1,358) (232,223)
Transfers 2,654,700 441,446 (10,258) (3,088,393) (2,505)
Effect of movements in exchange rates 34,468 (19,323) (493) 11,430 26,082
At 31 December 2009 14,825,066 46,602,364 2,249,929 2,237,776 65,915,135
Additions 84,623 2,036,599 15,603 468,156 2,604,981
Disposals (119,838) (908,315) (44,687) — (1,072,840)
Transfers 514,156 732,333 390 (1,246,879) —
Effect of movements in exchange rates 7,028 17,694 51 807 25,580
At 31 December 2010 15,311,035 48,480,675 2,221,286 1,459,860 67,472,856
Depreciation and impairment losses
At 1 January 2009 (1,330,796) (17,219,459) (795,347) — (19,345,602)
Depreciation for the year (449,605) (3,965,845) (198,641) — (4,614,091)
Disposals 2,887 187,045 18,610 — 208,542
Transfers (334,275) 351,138 (16,863) — —
Effect of movements in exchange rates (78) 13,161 23 — 13,106
At 31 December 2009 (2,111,867) (20,633,960) (992,218) — (23,738,045)
Depreciation for the year (459,341) (4,277,014) (217,630) — (4,953,985)
Disposals 23,386 790,476 36,978 — 850,840
Impairment — (550,248) — — (550,248)
Transfers — — — — —
Effect of movements in exchange rates (418) (2,111) (29) — (2,558)
At 31 December 2010 (2,548,240) (24,672,857) (1,172,899) — (28,393,996)
Carrying amounts
At 1 January 2009 10,425,278 26,550,585 1,484,857 4,896,028 43,356,748
At 31 December 2009 12,713,199 25,968,404 1,257,711 2,237,776 42,177,090
At 31 December 2010 12,762,795 23,807,818 1,048,387 1,459,860 39,078,860
Depreciation expense of RUB 2,750,918 thousand has been included in cost of goods sold (2009: RUB 2,526,958 thousand), RUB 1,677,216 thousand
in distribution expenses (2009: RUB 1,600,430 thousand), RUB 349,444 thousand in administrative expense (2009: RUB 320,191 thousand) and
RUB 176,407 thousand in cost of inventories as at 31 December 2010 (2009: RUB 166,512 thousand).
Impairment loss
In 2010 the Group has decided to cease production of beer at one of its production plants. The Group tested related brewery production facilities for
impairment and recognized an impairment loss of RUB 550,248 thousand with respect to property, plant and equipment.
The recoverable amount represents the assets’ fair value less cost to sell and it was determined by reference to both external sources (active market)
and internal sources (historical data on sale of similar and same assets).
The impairment provision was recognised in other expenses in the amount of RUB 550,248 thousand.
Total

Notes to the Consolidated Financial Statements for the year ended 31 December 2010
13. Intangible assets
’000 RUB Goodwill Trademarks
Amortisation expense of RUB 16,232 thousand has been included
in cost of goods sold (2009: RUB 12,589 thousand), RUB 27,319
thousand in distribution expenses (2009: RUB 19,740 thousand) and
RUB 184,280 thousand in administrative expense (2009: RUB 164,401
thousand).
(a) Impairment testing for cash generating units containing goodwill
For the purpose of impairment testing, goodwill is considered at
the Group level and has not been allocated to individual plants.
This represents the lowest level within the Group at which the goodwill
is monitored for internal management purposes.
The recoverable amount of the Group’s plants was based on their value
in use and was determined by discounting future cash flows generated
from the continuing use of the plants. Unless indicated otherwise, value
in use in 2010 was determined similarly as in 2009.
Software
and licences
Cost
At 1 January 2009 13,514,680 52,612 666,343 14,233,635
Additions — — 253,141 253,141
Transfers — — 2,505 2,505
Effect of movements in exchange rates 145,976 5,167 350 151,493
At 31 December 2009 13,660,656 57,779 922,339 14,640,774
Additions — — 426,934 426,934
Transfers — — — —
Effect of movements in exchange rates 53,692 1,513 196 55,401
At 31 December 2010 13,714,348 59,292 1,349,469 15,123,109
Amortisation
At 1 January 2009 — (1,315) (441,129) (442,444)
Amortisation for the year — (6,054) (190,676) (196,730)
Effect of movements in exchange rates — 139 61 200
At 31 December 2009 — (7,230) (631,744) (638,974)
Amortisation for the year — (5,883) (221,948) (227,831)
Effect of movements in exchange rates — (236) (134) (370)
At 31 December 2010 — (13,349) (853,826) (867,175)
Carrying amounts
At 1 January 2009 13,514,680 51,297 225,214 13,791,191
At 31 December 2009 13,660,656 50,549 290,595 14,001,800
At 31 December 2010 13,714,348 45,943 495,643 14,255,934
(b) Key assumptions used in discounted cash flow projections
Total
Key assumptions used in the calculation of recoverable amounts are
discount rates, terminal value growth rates and EBITDA margins.
(i) Discount rate
An after-tax discount rate of 14.5 % was applied in determining the
recoverable amount of the plants. The discount rate was estimated
based on past experience, and industry average weighted average cost
of capital, which was based on an average industry debt to total capital
ratio of 30.00 % at market interest rate of 8.56 %. The pre-tax discount
rate is 19.24 %.
(ii) Terminal value growth rate
Cash flows were projected based on past experience, actual operating
results and the Group’s five-year business plan. Cash flows for a further
5-year period were extrapolated using a declining growth rate of 2 % —
nil (2009: 5 % — nil), which does not exceed the long-term average
growth rate for the industry.
83

84
OAO Baltika Breweries and subsidiaries
(iii) Budgeted EBITDA growth
Budgeted EBITDA is expressed as the compound annual growth rates
in the initial five years of the plans used for impairment testing and
has been based on past experience adjusted for the following:
In the first year of the business plan sales volume was projected
to be higher than in 2010 since the market continued to grow
after the general downturn the market experienced during the
past two years and substantial increase in excise tax in 2010. The
anticipated annual sales volume growth included in the cash flow
projections for the years 2012 to 2015 is based on expectations
of demand growth levels driven by a return to beer consumption
levels of 3 years ago.
Sales price growth was assumed to be a small margin above
inflation in 2011 and in line with the inflation forecast by official
state authorities in 2012–2015.
Raw material costs are expected to increase significantly in 2011
due to the poor harvest in 2010 and to increase at a rate of 22 %
reducing to 10 % during the years 2012 to 2015. Other costs are
expected to increase at a rate of 10 % reducing to 7 % during the
years 2012 to 2015.
14. Equity accounted investees 15. Other investments
The Group has the following investment in an equity accounted investee:
CJSC Malterie Soufflet Saint
Petersburg (“Soufflet”)
This company produces malt.
Country Ownership/Voting
Russia 30 %
In 2010 the Group did not receive dividends from its investment in the
equity accounted investee.
The Group’s share of losses in its equity accounted investee for the
year ended 31 December 2010 was RUB 57,629 thousand (2009:
loss RUB 29,734 thousand). The Group’s share of post-acquisition
total recognised gains and losses in associates as at 31 December
2010 was RUB 154,258 thousand (31 December 2009: RUB 232,255
thousand).
(c) Sensitivity to changes in assumptions
Although no impairment loss was recognized in respect of goodwill the
determination of the recoverable amount is sensitive to the rate at which
the Group achieves its planned growth in production.
In determining a value in use of RUB 195,757,003 thousand (compared
to a carrying amount of RUB 53,334,794 thousand), management
has assumed that production volume will gradually increase and by
2015 will be 21 % greater than volumes projected for 2011.
If actual production volume were to be below estimated production
volume by 22 % in 2011 and subsequent years, the value in use would
approximate the carrying amounts of the plants and goodwill.
2010
’000 RUB
2009
’000 RUB
Non-current
Available-for-sale investments:
Measured at cost 87,251 9,781
Current
Loans and receivables:
Deposits 3,395,262 6,860,751
Originated loans to related parties 500,050 2,190,548
3,895,312 9,051,299
Available-for-sale investments stated at cost comprise unquoted equity
securities in the brewery and banking industries. There is no market for
these investments and there have not been any recent transactions that
provide evidence of fair value. However, management believes it unlikely
that the fair value at the end of the reporting period would differ significantly
from their carrying amount.
The Group’s exposure to credit, currency and interest rate risks related
to other investments are disclosed in note 24.

Notes to the Consolidated Financial Statements for the year ended 31 December 2010
16. Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
’000 RUB
2010
Assets
2009
Liabilities
2010 2009 2010
Net
2009
Property, plant and equipment — — (2,632,587) (2,557,771) (2,632,587) (2,557,771)
Intangible assets 17,230 15,281 (9,188) (10,102) 8,042 5,179
Investments — — (10,440) (17,459) (10,440) (17,459)
Inventories 44,652 33,157 (70,338) (15,246) (25,686) 17,911
Trade and other receivables 209,558 186,752 — — 209,558 186,752
Trade and other payables 507,995 733,716 — — 507,995 733,716
Net tax assets/(liabilities) 779,435 968,906 (2,722,553) (2,600,578) (1,943,118) (1,631,672)
During the year ended 31 December 2010 RUB 310,318 thousand (2009: RUB 231,490 thousand) of the movement in the net deferred tax liability
was recognized in the income statement and RUB 1,128 thousand (2009: RUB 13,058 thousand), relating to foreign exchange differences,
was recognized directly in other comprehensive income.
17. Inventories 18. Trade and other receivables
2010
’000 RUB
2009
’000 RUB
Raw materials and consumables 4,215,009 3,328,168
Work in progress 449,659 288,884
Finished goods and goods for
resale
Write-down of inventories in the
current year
1,116,766 679,001
5,781,434 4,296,053
127,316 178,636
In 2010 raw materials, consumables and changes in finished goods
and work in progress recognised as cost of sales amounted to RUB
24,926,176 thousand (2009: RUB 30,616,587 thousand).
2010
’000 RUB
2009
’000 RUB
Trade receivables 3,241,860 6,791,244
Advances to suppliers 2,228,165 720,358
VAT receivable 134,331 165,512
Other receivables 1,056,315 384,979
Trade and other category
receivables (current)
6,660,671 8,062,093
The Group’s exposure to credit risk and currency risk related to trade
and other receivables is disclosed in note 24.
19. Cash and cash equivalents
2010
’000 RUB
2009
’000 RUB
Bank balances 361,145 288,368
Deposits 205,841 1,452,334
Cash and cash equivalents in the
statement of financial position and
in the statement of cash flows
566,986 1,740,702
The Group’s exposure to interest rate risk and a sensitivity analysis for
financial assets and liabilities are disclosed in note 24.
85

86
OAO Baltika Breweries and subsidiaries
20. Capital and reserves
(a) Share capital and share premium
Number of shares unless otherwise stated
Ordinary shares Preference shares
2010 2009 2010 2009
Authorised shares
Par value RUB 1 RUB 1 RUB 1 RUB 1
On issue at beginning of the year 151,714,594 151,714,594 12,326,570 12,326,570
On issue at end of the year, fully paid 151,714,594 151,714,594 12,326,570 12,326,570
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the
Company.
The holders of preference shares have no right of conversion or redemption, but are entitled to an annual dividend equal to the nominal value of the
shares multiplied by the interest rate of the Savings Bank of the Russian Federation, plus 10 %. If the dividend is not paid, preference shares carry the
right to vote until the following Annual Shareholders’ Meeting. However, the dividend is not cumulative. The preference shares also carry the right
to vote in respect of issues that influence the interests of preference shareholders, including reorganisation and liquidation of the Company.
In the event of liquidation, preference shareholders first receive any declared unpaid dividends and the par value of the preference shares (“liquidation
value”). Thereafter all shareholders, ordinary and preference, participate equally in the distribution of the remaining assets.
(b) Dividends
In accordance with Russian legislation, distributable reserves are limited
to the balance of accumulated retained earnings as recorded in the
Company’s statutory financial statements, prepared in accordance
with Russian Accounting Principles. As at 31 December 2010 the
Company had retained earnings, including profit for the current year,
of approximately RUB 24,166,377 thousand (31 December 2009: RUB
34,906,210 thousand).
The following table details the dividends declared by the Company for
the years ended 31 December 2010 and 31 December 2009:
RUB per
share
’000 RUB
Year ended 31 December 2009
Preference shares
Dividends for 2008
Ordinary shares
85.1 1,048,991
Dividends for 2008 85.1 12,910,912
Year ended 31 December 2010
Preference shares
Dividends for 2009
Ordinary shares
128 1,577,801
Dividends for 2009 128 19,419,468
Preference shares
Interim dividends for 2010
Ordinary shares
42 517,716
Interim dividends for 2010 42 6,372,013
The shareholders’ meeting held on 8 April 2010 approved dividends
amounting to RUB 20,997,269 thousand. The interim dividends for 6
months of 2010 amounting to RUB 6,889,729 thousand were approved
by an extraordinary shareholders’ meeting on 26 August 2010.
21. Earnings per share
The calculation of earnings per share at 31 December 2010 was based
on the profit for the year attributable to ordinary shareholders of RUB
17,075,665 thousand (2009: RUB 22,323,278 thousand), and
a weighted average number of ordinary shares outstanding during the
year of 151,714,594 (2009: 151,714,594), calculated as shown below.
The Company has no dilutive potential ordinary shares.
Weighted average number of ordinary shares
Number of shares 2010 2009
Issued shares at 1 January
Weighted average number
151,714,594 151,714,594
of shares for the for the year ended
31 December
151,714,594 151,714,594
The following is a reconciliation of the profit attributable to ordinary
shareholders:
Profit attributable to ordinary shareholders
Profit for the year attributable
to shareholders of the Company
Preference dividends recognised
during the year
2010
’000 RUB
2009
’000 RUB
19,171,182 23,372,269
(2,095,517) (1,048,991)
Profit attributable to ordinary shares 17,075,665 22,323,278

Notes to the Consolidated Financial Statements for the year ended 31 December 2010
22. Loans and borrowings
This note provides information about the contractual terms of the Group’s interest-bearing loans and borrowings, which are measured at amortised
coSt. For more information about the Group’s exposure to interest rate, foreign currency and liquidity risks, see note 24.
2010
’000 RUB
2009
’000 RUB
Current liabilities
Current portion of secured bank loans — 181,572
— 181,572
(a) Terms and debt repayment schedule
Terms and conditions of outstanding loans were as follows:
’000 RUB Currency
Secured bank loan USD
Nominal
interest rate
LIBOR 6m
+0,75 %
Year
of maturity
31 December 2010 31 December 2009
Face value
Carrying
amount
Face value
Carrying
amount
2009–2010 — — 181,572 181,572
— — 181,572 181,572
The bank loan was fully secured by the guarantee of the Company’s parent company, Baltic Beverages Holding AB.
23. Trade and other payables
2010
’000 RUB
2009
’000 RUB
Trade payables 6,387,505 5,214,709
Taxes payable 3,787,166 4,214,958
Accrued salaries, wages and
benefits
1,449,655 1,276,828
Dividends payable 306,131 114,655
Payables to equity accounted
investee
38,487 42,902
Other payables and provisions 1,289,568 2,534,529
13,258,512 13,398,581
There are potential claims against the Group from certain of its suppliers
that allege the Group has not fulfilled contract terms. The information
usually required by IAs 37 Provisions, Contingent Liabilities and
Contingent Assets in respect of these claims is not disclosed on the
grounds that it can be expected to prejudice seriously the position of the
Group in potential disputes.
The Group’s exposure to currency and liquidity risk related to trade and
other payables is disclosed in note 24.
87

88
OAO Baltika Breweries and subsidiaries
24. Financial instruments and risk management
(a) Overview
The Group has exposures to the following risks from the use of financial
instruments:
Credit risk
Liquidity risk
Market risk
This note presents information about Group’s exposure to each
of the above risks, the Group’s objectives, policies and processes
for measuring and managing risk and the Group’s management
of capital. Further quantitative disclosures are included throughout these
consolidated financial statements.
Risk management framework
The Board of Directors has overall responsibility for the establishment
and oversight of the Group’s risk management framework. The Board
has established an Audit Committee which is responsible for developing
and monitoring the Group’s risk management policies. The Audit
Committee reports regularly to the Board of Directors on its activities.
The Group’s risk management systems are established to identify and
analyse the risks faced by the Group, to set appropriate risk limits and
controls, and to monitor risks and adherence to limits. Risk management
systems are reviewed regularly to reflect changes in market conditions
and the Group’s activities. The Group, through its training and
management standards and procedures, aims to develop a disciplined
and constructive control environment in which all employees understand
their roles and obligations.
The Group’s Audit Committee oversees how management monitors
compliance with the Group’s risk management system and procedures
and reviews the adequacy of the risk management framework in relation
to the risks faced by the Group. The Audit Committee is assisted in its
oversight role by Internal Audit. Internal Audit undertakes both regular
and ad hoc reviews of risk management controls and procedures, the
results of which are reported to the Audit Committee.
(b) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations and arises principally from the Group’s receivables from
customers and loans and receivables.
(i) Trade and other receivables
The Group’s exposure to credit risk is influenced mainly by the individual
characteristics of each customer. However, the management also
considers the demographics of the Group’s customer base, including
the default risk of the industry in which customers operate, as these
factors may have an influence on credit risk, particularly in the currently
deteriorating economic circumstances. Approximately 17.9 % (2009:
14.9 %) of the Group’s revenue is attributable to sales transactions with
a single customer. Substantially all of Group’s customers are located
in the Russian Federation.
Management has established a credit policy under which each new
customer is analysed individually for creditworthiness before the Group’s
standard payment and delivery terms and conditions are offered.
The Group’s review includes background checks on new customers.
Purchase limits are established for each customer, and represent the
maximum open amount without requiring approval from the Credit
Committee; these limits are reviewed monthly. Customers that fail
to meet the Group’s benchmark creditworthiness may transact with the
Group only on a prepayment basis.
About 68 % of the Group’s customers have been transacting with the
Group for more than two years, and losses have occurred infrequently.
In monitoring customer credit risk, customers are grouped according
to their credit characteristics, including whether they are an individual
or legal entity, whether they are a wholesale or retail customers,
geographic location, maturity, and existence of any previous financial
difficulties. Trade receivables relate mainly to the Group’s wholesale
customers. The Group requires collateral in respect of trade receivables
in the form of bank guarantees. Credit evaluations are performed
on all customers, other than related parties, requiring credit over
a certain amount.
The Group establishes an allowance for impairment that represents its
estimate of incurred losses in respect of trade and other receivables
and investments. The main components of this allowance are a specific
loss component that relates to individually significant exposures, and
a collective loss component established for groups of similar assets
in respect of losses that have been incurred but not yet identified.
The collective loss allowance is determined based on historical
data of payment statistics for similar financial assets.
(ii) Loans and receivables
The Group limits its exposure to credit risk by only investing in liquid
securities in accordance with Group’s deposit policy and only with
counterparties that are mostly state-owned banks or the banks
approved by ultimate parent company. In order to determine the
amounts to be deposited with each bank the Group studies the financial
statements of the bank and bank credit ratings. The status of the
banks is reconsidered every 6 months. The Group does not expect any
counterparties to fail to meet its obligations.
(iii) Exposure to credit risk
The carrying amount of financial assets represents the maximum credit
exposure. The maximum exposure to credit risk at the reporting date
was:
Carrying amount
2010
’000 RUB
2009
’000 RUB
Trade and other receivables 4,298,175 7,176,223
Available-for-sale financial assets 87,251 9,781
Loans and receivables 3,895,312 9,051,299
Cash and cash equivalents 566,986 1,740,702
8,847,724 17,978,005
The maximum exposure to credit risk for trade receivables at the
reporting date by type of customer was:
Carrying amount
2010
’000 RUB
2009
’000 RUB
Wholesale customers 1,798,666 5,752,447
Retail customers 1,529,902 1,120,191
Accumulated impairment losses on
receivables
3,328,568 6,872,638
(86,708) (81,394)
3,241,860 6,791,244
The Group’s most significant customer, a domestic wholesaler, accounts
for RUB 960,911 thousand of the trade receivables carrying amount at
31 December 2010 (2009: RUB 998,900 thousand).
Substantially all the Group’s receivables relate to sales to customers
in Russia.

Notes to the Consolidated Financial Statements for the year ended 31 December 2010
Impairment losses
The ageing of trade receivables at the reporting date was:
Gross
2010
’000 RUB
Impairment
2010
’000 RUB
Gross
2009
’000 RUB
Impairment
2009
’000 RUB
Current 2,965,484 — 6,680,914 —
Past due
0–90 days
277,686 1,310 110,330 —
Past due
more than 90
days
(c) Liquidity risk
85,398 85,398 81,394 81,394
3,328,568 86,708 6,872,638 81,394
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated
with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to the Group’s reputation.
Typically, the Group ensures that it has sufficient cash on demand to meet expected operational
expenses for a period of 18 days, including the servicing of financial obligations; this excludes the
potential impact of extreme circumstances that cannot be reasonably predicted, such as instability
of financial system and the impact of monopolists and changes in statutory regulations. In addition
the Group maintains the following lines of credit:
USD 205,991 thousand multicurrency unsecured credit facility. Interest would be payable for
EURO / USD / RUB at the rate of LIBOR / EURIBOR / Cost of funds for the lender +0.75 %.
USD 105,935 thousand multicurrency unsecured credit/overdraft facility. Interest would be
determined as each tranche is drawn down.
The following are the contractual maturities of financial liabilities, including estimated interest
payments and excluding the impact of the netting agreements. It is not expected that the cash
flows included in the maturity analysis could occur significantly earlier, or at significantly different
amounts.
31 December 2010
’000 RUB
Carrying
amount
Contractual
cash flows
0–6 months
6–12
months
1–2 years 2–5 years
Non-derivative financial liabilities 13,258,512 13,258,512 13,258,512 — — — —
Trade and other payables 13,258,512 13,258,512 13,258,512 — — — —
31 December 2009
’000 RUB
Carrying
amount
Contractual
cash flows
The movement in the allowance for impairment in respect of trade
receivables during the year was as follows:
0–6 months
6–12
months
2010
’000 RUB
1–2 years 2–5 years
2009
’000 RUB
Balance at beginning of the year 81,394 111,898
Impairment loss recognised/
(reversed)
Amounts written off against trade
receivables
10,788 (8,501)
(5,474) (22,003)
Balance at end of the year 86,708 81,394
Based on historic default rates the Group believes that no general
impairment allowance is necessary in respect of trade receivables not
past due and past due by up to 90 days. 97 % of the balance, which
includes the amount owed by the Group’s most significant customer
(see above), relates to customers that have a good track record with
the Group. The total impairment loss 31 December 2010 of RUB 86,708
thousand relates to collective loss established for overdue receivables
(2009: RUB 81,394 thousand).
The allowance account in respect of trade receivables is used to record
impairment losses unless the Group is satisfied that no recovery of the
amount owing is possible; at that point the amount is considered
irrecoverable and written off against the financial asset directly.
Non-derivative financial liabilities 181,572 182,674 182,674 — — — —
Secured bank loans 13,398,581 13,398,581 13,398,581 — — — —
Trade and other payables 13,580,153 13,581,255 13,581,255 — — — —
More
than 5
years
More
than 5
years
89

90
OAO Baltika Breweries and subsidiaries
(d) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Group’s income or the value
of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimizing the return.
(i) Currency risk
The Group is exposed to currency risk on purchases and borrowings that are denominated in a currency other than the respective functional currencies
of the Group entities, primarily the Russian Rouble (RUB). The currencies in which these transactions are primarily denominated are USD, EURO and
AZN.
In respect of monetary assets and liabilities denominated in foreign currencies, the Group’s policy is to ensure that its net exposure is kept
to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.
Exposure to currency risk
The Group’s exposure to foreign currency risk was as follows based on notional amounts:
EURdenominated
USDdenominated
AZNdenominated
EURdenominated
USDdenominated
AZNdenominated
’000 RUB
2010 2010 2010 2009 2009 2009
Current assets
Cash and cash equivalents 3,579 12,734 64,891 11,428 29,234 17,593
Loans and receivables 558,944 2,728,235 108,083 738,816 2,797,109 —
Trade receivables 11,100 — 60,907 15,789 — 31,315
Current liabilities
Secured bank loans — — — — (181,572) —
Trade payables (388,857) (363,427) (15,083) (576,325) (109,563) (8,275)
Gross balance sheet exposure 184,766 2,377,542 218,798 189,708 2,535,208 40,633
Net exposure 184,766 2,377,542 218,798 189,708 2,535,208 40,633
The following exchange rates applied during the year and as at the end of the year:
RUB 1 Average rate Reporting date spot rate
equals 2010 2009 2010 2009
USD 0.0329 0.0315 0.0328 0.0331
EURO 0.0248 0.0227 0.0248 0.0230
AZN 0.0264 0.0252 0.0262 0.0266
Sensitivity analysis
A 20 % strengthening of the RUB, as indicated below, against the following currencies at 31 December would have decreased profit or loss by the
amounts shown below. This analysis is based on foreign currency exchange rate variances that the Group considered to be reasonably possible at the
end of the reporting period. The analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the
same basis for 2009.
’000 RUB Equity Profit or loss
2010
USD (20 % strengthening) — (475,508)
EUR (20 % strengthening) — (26,069)
AZN (20 % strengthening) — (43,672)
2009
USD (20 % strengthening) — (507,042)
EUR (20 % strengthening) — (22,914)
AZN (20 % strengthening) — (7,959)
A weakening of the RUB against the above currencies at 31 December would have had an equal, but opposite effect on the above currencies to the
amounts shown above, on the basis that all other variables remain constant.

(ii) Interest rate risk
Changes in interest rates impact primarily loans and borrowings by
changing either their fair value (fixed rate debt) or their future cash
flows (variable rate debt). Management does not have a formal policy
of determining how much of the Group’s exposure should be subject
to fixed or variable rates. However, at the time of raising new loans or
borrowings management uses its judgment to decide whether it believes
that a fixed or variable rate would be more favourable to the Group over
the expected period until maturity.
Profile
Notes to the Consolidated Financial Statements for the year ended 31 December 2010
At the reporting date the interest rate profile of the Group’s interestbearing
financial instruments was:
’000 RUB
Carrying amount
2010 2009
Fixed rate instruments
Financial assets 4,101,153 10,503,633
Variable rate instruments
4,101,153 10,503,633
Financial liabilities — (181,572)
Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and
liabilities at fair value through profit or loss. Therefore a change
in interest rates at the reporting date would not affect profit or loss.
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would
have increased (decreased) profit and loss by the amounts shown
below. There would have been no impact directly on equity. This analysis
assumes that all other variables, in particular foreign currency rates,
remain constant. The analysis is performed on the same basis for 2009.
Profit or loss
2010 100 bp 100 bp
’000 RUB increase decrease
Variable rate instruments — —
Cash flow sensitivity — —
2009
’000 RUB
Variable rate instruments (1,816) 1,816
Cash flow sensitivity (1,816) 1,816
(iii) Other market risk
Material investments are managed on an individual basis and all buy
and sell decisions are approved by the Board of Directors.
The primary goal of the Group’s investment strategy is to maximise
investment returns.
The Group does not enter into commodity contracts other than to meet
the Group’s expected usage and sale requirements; such contracts are
not settled net.
(e) Accounting classifications and fair values
(i) Fair values
The basis for determining fair value is disclosed in note 4. The fair value
of unquoted equity instruments is discussed in note 15. In other cases
management believes that the fair value of the Group’s financial assets
and liabilities approximates their carrying amounts.
Interest rates used for determining fair value
The interest rates used to discount estimated cash flows, where
applicable, are based on the government yield curve at the reporting
date plus an adequate credit spread, and were as follows:
Short-term bank deposits in RUB
2010 2009
1.90 % –
11.00 %
3.30 % –
13.15 %
Short-term bank deposits in USD 3.50 % – 5.90 % 0.50 % – 5.90 %
Short-term bank deposits in EUR 3.50 % – 3.90 % 1.30 % – 3.90 %
Short-term bank deposits in AZN 6.50 % –
Originated loans to related parties 3.67 % 6.60 %
Loans and borrowings
(f) Capital management
LIBOR 6m +
0.75 %
LIBOR 6m +
0.75 %
The Group’s policy is to maintain a strong capital base so
as to maintain investor, creditor and market confidence and
to sustain future development of the business. The Board of Directors
monitors the level of dividends to ordinary shareholders.
The Group’s debt to capital ratio at the end of the year was as follows:
’000 RUB 2010 2009
Total liabilities 15,612,370 15,957,254
Less: cash and cash equivalents (566,986) (1,740,702)
Net debt 15,045,384 14,216,552
Total equity 55,027,837 63,681,313
Debt to capital ratio at
31 December
0.27 0.22
Neither the Company nor any of its subsidiaries are subject to externally
imposed capital requirements.
91

92
OAO Baltika Breweries and subsidiaries
25. Operating leases
Non-cancellable operating lease rentals are payable as follows:
’000 RUB 2010 2009
Less than one year 180,599 222,589
Between one and five years 53,126 59,137
More than five years 109,193 239,070
(a) Insurance
342,918 520,796
The Group leases a number of land plots and buildings under operating
leases. Lessors for these leases are state authorities and third parties.
The leases of land plots typically run for 6–49 years. Leases of buildings
typically run for 11 months with an option to renew the lease after that
date. The Group has no contingent rent arrangements or subleases.
During the year ended 31 December 2010 an amount of RUB 268,848
thousand was recognised as an expense in profit or loss in respect
of operating leases (2009: RUB 287,110 thousand).
The insurance industry in the Russian Federation is in a developing
state and many forms of insurance protection common in other parts
of the world are not yet generally available. The Group does not have
full coverage for its plant facilities, business interruption, or third party
liability in respect of property or environmental damage arising from
accidents on Group property or relating to Group operations. Until the
Group obtains adequate insurance coverage, there is a risk that the loss
or destruction of certain assets could have a material adverse effect on
the Group’s operations and financial position
(b) Taxation contingencies in the Russian Federation
The taxation system in the Russian Federation continues to evolve
and is characterised by frequent changes in legislation, official
pronouncements and court decisions, which are sometimes
contradictory and subject to varying interpretation by different tax
authorities. Taxes are subject to review and investigation by a number
of authorities, which have the authority to impose severe fines, penalties
and interest charges. A tax year remains open for review by the tax
authorities during the three subsequent calendar years; however, under
certain circumstances a tax year may remain open longer. Recent
events within the Russian Federation suggest that the tax authorities
are taking a more assertive and substance-based position in their
interpretation and enforcement of tax legislation.
These circumstances may create tax risks in the Russian Federation
that are substantially more significant than in other countries.
Management believes that it has provided adequately for tax liabilities
based on its interpretations of applicable Russian tax legislation, official
pronouncements and court decisions. However, the interpretations of the
relevant authorities could differ and the effect on these consolidated
financial statements, if the authorities were successful in enforcing their
interpretations, could be significant.
26. Capital commitments
As at 31 December 2010 the Group had the following commitments
relating to property, plant and equipment (31 December 2009: RUB
298,073 thousand):
Project
2010
’000 RUB
Baltika-St. Petersburg plant 148,390
Baltika-Rostov plant 31,080
Baltika-Novosibirsk plant 26,018
Baltika-Khabarovsk plant 21,801
Baltika-Yaroslavl plant 17,900
Baltika-Pikra plant 12,553
Baltika-Samara plant 6,488
Baltika-Chelyabinsk plant 3,522
Baltika-Baku plant 2,808
Baltika-Tula plant 1,249
Baltika-Voronezh plant 483
27. Contingencies 28. Related party transactions
(a) Control relationships
272,292
The Company’s parent company is Baltic Beverages Holding AB (refer
note 1(b)). The Company’s ultimate parent company is Carlsberg
A/S and the Company’s ultimate controlling party is the Carlsberg
Foundation. Carlsberg A/S produces consolidated financial statements
that are available for public use.
(b) Management remuneration
Key management received the following remuneration during the year,
which is included in personnel costs (see note 9):
’000 RUB 2010 2009
Salaries and bonuses 398,169 427,026
Compulsory social security
contributions
Contributions to defined
contribution plan
5,503 12,719
11,003 9,989
Termination benefits 26,427 —
441,102 449,734

Notes to the Consolidated Financial Statements for the year ended 31 December 2010
(c) Transactions with other related parties
The Group’s other related party transactions are disclosed below.
(i) Revenue
’000 RUB
Sale of goods:
Transaction value
2010
Transaction value
2009
Outstanding balance
2010
Outstanding balance
2009
Fellow subsidiaries
Royalties received
431,237 49,912 134,164 21,813
Fellow subsidiaries
Interest received:
570,978 62,767 34,542 —
Carlsberg Breweries A/S 2,690 591 50 591
Parent company
Services provided:
2,229 597 — 597
Fellow subsidiaries 16,958 — —
Equity accounted investee
Other income
57,059 24,361 28,594 9,214
Parent company — 79,237 — —
1,081,151 217,465 197,350 32,215
(ii) Expenses
’000 RUB
Purchase of goods:
Transaction value
2010
Transaction value
2009
Outstanding balance
2010
Outstanding balance
2009
Equity accounted investee 231,072 571,736 38,487 42,902
Carlsberg Breweries A/S 11,379 13,971 — 33,062
Fellow subsidiaries
Services received:
57,979 18,380 3,300 7,012
Carlsberg Breweries A/S 96,188 39,430 30,351 —
Fellow subsidiaries
Royalties paid:
11,610 178 1,805 —
Carlsberg Breweries A/S 417,385 630,571 35,209 291,756
Fellow subsidiaries
Finance costs:
19,484 18,803 5,987 3,626
Carlsberg Breweries A/S
Other expenses:
— 101,556 — —
Carlsberg Breweries A/S 106,812 150,766 317,336 162,688
951,909 1,545,391 432,475 541,046
During the year ended 31 December 2010 the Group’s purchases of malt from Soufflet, an associate of the Group, amounted to RUB 231,072
thousand (excluding VAT) or 6.9 % of the total value of malt purchases and own production and 30,008 tons or 9.1 % of the total volume of malt
purchases and own production. During the year ended 31 December 2009 the Group’s purchases of malt from Soufflet amounted to RUB 571,736
thousand (excluding VAT) or 17.1 % of the total value of malt purchases and own production and 41,926 tons or 12.6 % of the total volume of malt
purchases and own production.
All outstanding balances with related parties are to be settled in cash within two months of the reporting date. None of the balances are secured.
93

94
(iii) Loans
’000 RUB
OAO Baltika Breweries and subsidiaries
29. Subsidiaries
Amount loaned Amount loaned Outstanding balance Outstanding balance
2010 2009 2010 2009
Loans given:
Carlsberg Breweries A/S 1,100,523 1,089,951 500,050 1,089,951
Parent company 348,697 1,100,597 — 1,100,597
1,449,220 2,190,548 500,050 2,190,548
The outstanding loan to Carlsberg Breweries A/S bear interest at 3.67 % per annum and is due in January 2011.
Name Nature of business
Country
of incorporation
Ownership / voting
2010
Ownership / voting
2009
OOO Baltika-Ukraine Distribution of Baltika beer Ukraine 100 % 100 %
Baltika S.R.L. Distribution of Baltika beer Moldova 100 % 100 %
Baltika-Almaty LLP Distribution of Baltika beer Kazakhstan — 100 %
OOO Baltika Distribution of Baltika beer Kirgizia 100 % 100 %
OOO Baltika-Bel Distribution of Baltika beer Belorussia 100 % 100 %
OOO Terminal Podolsk Warehouse Russia 100 % 100 %
OOO Universalopttorg Warehouse Russia — 100 %
Baltika Deutschland GmbH Distribution of Baltika beer Germany 100 % 100 %
Baltika-Baku LLC Beer Production Azerbaijan 100 % 100 %
Baku Pivo JSC Beer Production Azerbaijan 91 % 91 %

2010 Corporate Transactions that are Deemed Related Party Transactions
Based on the Federal Law “On Joint Stock Companies”
2010 Corporate Transactions that are Deemed Related Party Transactions Based on the Federal
Law “On Joint Stock Companies”
Date and Approval
Authority
No Contracting Parties Type of Contract Contract Price Interested party(ies)
21.01.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, A. Artemiev, President,
member of the Board of Directors
Sales Agreement RUB 9,496,635.65
Baltika Breweries (Seller) and
Baltika-Baku LLC (Buyer)
1.
21.01.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
—
Additional Agreement to Beer Supply
Contract No. 773 as of 30.11.2009
Baltika Breweries (Supplier) and
Carlsberg Denmark (Buyer)
2.
21.01.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
Belorussian rubles 175,615,860, including VAT in the
amount of Belorussian rubles 26,788,860
Additional Agreement No. 3 to Contract
No. 04/08-BLR as of 30.01.2008 on
trademark promotion services
Baltika Breweries (Customer)
and Baltika-Bel LLC (Contractor)
3.
21.01.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
RUB 953,845.92, including VAT in the amount
of RUB 145,501.92
Additional Agreement No. 3 to Contract
No. 04/08-MD as of 30.01.2008 on trademark
promotion services
Baltika Breweries (Customer)
and ICS Baltika SRL (Contractor)
4.
21.01.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
Kazakh tenge 2,001,339, including VAT in the
amount of Kazakh tenge 305,289
Additional Agreement No. 5 to Contract
No. 02/0-KZ as of 30.01.2008 on trademark
promotion services
Baltika Breweries (Customer)
and Baltika-Almaty LLC
(Contractor)
5.
11.02.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, A. Artemiev, President,
member of the Board of Directors
—
Additional Agreement No. 1 to Equipment
Supply Contract No. Ref/SAB-202/2010
as of 21.01.2010
Baltika Breweries (Seller) and
Baltika-Baku LLC (Buyer)
6.
11.02.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
Remuneration is determined by the Parties for each
consulting service on an individual basis. Per the
agreement, remuneration cannot exceed Euro
5,000,000
Consulting Service Agreement
Baltika Breweries (Client) and
Feldschlösschen Getränke AG
(Consultant)
7.
22.03.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, A. Artemiev, President,
member of the Board of Directors
As stipulated by the License Agreement
Additional Agreement to the License
Agreement for the production of “Baltika” beer
as of 23.05.2008
Baltika Breweries (Licensor)
and “UZCARLSBERG” LLC
(Licensee)
8.
22.03.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, A. Artemiev, President,
member of the Board of Directors
The price of services is determined by hourly rates
which depend on the category of the Contractor’s
specialists. The total price of the Agreement shall
not exceed RUB 2,500,000
Service Agreement concerning processing
equipment maintenance and operation
Baltika Breweries (Contractor)
and UZCARLSBERG LLC
(Customer)
9.
22.03.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
The Agent’s fee shall be 5 % of the actual costs
borne by the Agent, but shall not exceed RUB
44,035. The total price of the Agreement, including
Agent’s fee, shall not exceed RUB 924,735
Agency Agreement on cargo custom
clearance
Baltika Breweries (Principal) and
ICS Baltika SRL (Agent)
10.
22.03.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, A. Artemiev, President,
member of the Board of Directors,
B. Søndenskov, member of the
Board of Directors
As stipulated by the Contract
Additional Agreement to Beer Supply
Agreement No. D-363/09 as of 26.11.2009
Baltika Breweries (Supplier) and
DERBES Brewery Ltd (Buyer)
11.
22.03.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, J.B. Rasmussen,
member of the Board of Directors
Euro 20,060, including Russian VAT (18 %) totaling
Euro 3,060
Consulting Service Agreement
Baltika Breweries (Customer)
and Carlsberg Breweries A/S
(Contractor)
12.
95

96
Date and Approval
Authority
No Contracting Parties Type of Contract Contract Price Interested party(ies)
Baltika Breweries | Annual report 2010
16.04.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, A. Artemiev, President,
member of the Board of Directors
As stipulated by the License Agreement
Additional Agreement to the License
Agreement on the production and sale
of “Baltika” beer as of 23.05.2008
Baltika Breweries (Licensor) and
UZCARLSBERG LLC (Licensee)
13.
16.04.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
The price of third-party services and the Agent’s
remuneration shall be determined by the Parties
in individual agreements concluded within the
framework of the Agency Agreement. The total price
of the Agreement, including the Agent’s fee, shall not
exceed Belorussian rubles 472,000,000, including
Russian VAT
Agency Agreement
Baltika Breweries (Principal) and
Baltika-Bel LLC (Agent)
14.
16.04.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
Belorussian rubles 233,792,995.96, including
Russian VAT, and an Agency fee in the amount
of Belorussian rubles 1,855,499.96, including
Russian VAT
Additional Agreement No. 1 to Agency
Agreement No. 02/2010-BLR
Baltika Breweries (Principal) and
Baltika-Bel LLC (Agent)
15.
16.04.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
RUB 8,933,832, including Russian VAT in the
amount of RUB 1,608,089.76
Additional Agreement to the Paid Service
Agreement No. 2010-MD as of 23.12.2009
Baltika Breweries (Customer)
and ICS Baltika SRL (Contractor)
16.
16.04.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
RUB 2,894,728, including Russian VAT in the
amount of RUB 521,051.04
Supplement No. 3 to Paid Service Agreement
No. 2010-MD as of 23.12.2009
Baltika Breweries (Customer)
and ICS Baltika SRL (Contractor)
17.
16.04.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
—
Additional Agreement No. 1 to Paid Service
Agreement No. 2010-UKR as of 01.01.2010
Baltika Breweries (Customer)
and Baltika-Ukraine LLC
(Contractor)
18.
16.04.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, A. Artemiev,
President, member of the Board
of Directors
T-shirt Supply Agreement RUB 2,229,040
Baltika Breweries (Buyer) and
UZCARLSBERG LLC (Supplier)
19.
16.04.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, A. Artemiev, President,
member of the Board of Directors.
Stabilizer Sales Agreement RUB 4,174,893.90
Baltika Breweries (Seller) and
Baltika-Baku LLC (Buyer)
20.
16.04.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
Flash-card Supply Agreement RUB 10,588,200
Baltika Breweries (Buyer) and
Carlsberg Group Procurement
AG (Supplier)
21.
16.04.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, A. Artemiev, President,
member of the Board of Directors
T-shirt Supply Agreement RUB 6,656,640
Baltika Breweries (Buyer) and
UZCARLSBERG LLC (Supplier)
22.
14.05.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, A. Artemiev, President,
member of the Board of Directors
RUB 7,700, excluding VAT, per 1 ton till the supply
volume under the Agreement reaches 30,000 tons;
RUB 7,350 excluding VAT, per 1 ton when the
supply volume under the Agreement is 30,001 tons
and more. The total price of the Agreement shall not
exceed RUB 510,300,000, excluding VAT
Malt Supply Agreement
Baltika Breweries (Buyer)
and CJSC Malt Plant Soufflet
St. Petersburg (Seller)
23.
14.05.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
—
Additional Agreement No. 2 to Contract
No. Ref/SAB-202/2010
Baltika Breweries (Seller) and
Baltika-Baku LLC (Buyer)
24.
14.05.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, J.B. Rasmussen,
member of the Board of Directors
RUB 1,581,188
Additional Agreement No. 3 to Contract
No. 01-08-CB
Baltika Breweries (Buyer) and
Carlsberg Breweries A/S (Seller)
25.

Date and Approval
Authority
No Contracting Parties Type of Contract Contract Price Interested party(ies)
2010 Corporate Transactions that are Deemed Related Party Transactions Based on the Federal
Law “On Joint Stock Companies”
25.06.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
Marketing Cost Agreement Euro 115,510
Baltika Breweries (Beneficiary)
and Oy Sinebrychoff Ab
(Investor)
26.
25.06.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, A. Artemiev, President,
member of the Board of Directors,
B. Søndenskov, member of the
Board of Directors
Payment shall be made based on the actual use
of freight cars, based on daily rates calculated
depending on final destination
Freight-car Leasing Agreement
Baltika Breweries (Lessor) and
DERBES Brewery Ltd (Lessee)
27.
25.06.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, A. Artemiev, President,
member of the Board of Directors
As stipulated by the primary contract
Additional Agreement No. 1 to Contract
No. BL/BK-1M
Baltika Breweries (Contractor)
and Baltika-Baku LLC
(Customer)
28.
25.06.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
Supply Agreement Up to Euro 6,000
Baltika Breweries (Buyer) and
Baltika Deutschland GmbH
(Supplier)
29.
25.06.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, J.B. Rasmussen,
member of the Board of Directors,
B. Søndenskov, member of the
Board of Directors, U. Andersen,
member of the Board of Directors
The credit is for Euro 28,000,000; interest rates are
as follows:
RUB for a period of 1 week — 4.05 % APR;
for a period of 1 month — 4.55 % APR; for
a period of 2 months — 4.90 % APR; for
a period of 3 months — 5.55 % APR; for a period
of 6 months — 6.40 % APR; USD for a period
of 1 week — 0.75 % APR; for a period of 1 month —
1.65 % APR; for a period of 2 months — 1.90 %
APR; for a period of 3 months — 2.40 % APR;
for a period of 6 months — 3.40 % APR; Euro for
a period of 1 week — 0.60 % APR; for a period of 1
month — 0.87 % APR; for a period of 2 months —
1.30 % APR; for a period of 3 months — 2.10 %
APR; for a period of 6 months — 3.35 % APR
Credit Agreement
Baltika Breweries (Creditor) and
Baltic Beverages Holding AB
(Borrower)
30.
25.06.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, J.B. Rasmussen,
member of the Board of Directors
RUB 1,100,000,000 (one billion one hundred
million); the interest rate is the best market interest
rate for the corresponding period and amount plus
0.15 % APR
Fund Allocation Agreement
Baltika Breweries (Party 1)
and Carlsberg Breweries A/S
(Party 2)
31.
09.07.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, J.B. Rasmussen,
member of the Board of Directors
As stipulated by the License Agreement
Additional Agreement to the Carlsberg
Trademark License Agreement
as of 22.03.2002
Baltika Breweries (Licensee)
and Carlsberg Breweries A/S
(Licensor)
32.
09.07.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
Beer Supply Contract Euro 585,000
Baltika Breweries (Supplier) and
Oy Sinebrychoff Ab (Buyer)
33.
09.07.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
Canadian dollars 17,205, including Russian VAT
in the amount of Canadian dollars 3,096.9
Paid Service Agreement
Baltika Breweries (Customer)
and Carlsberg Canada Inc.
(Contractor)
Baltika Breweries (Licensee) and
Oy Sinebrychoff Ab (Licensor)
34.
13.08.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
—
Agreement on the termination of the License
Agreement as of 08.01.2001
35.
13.08.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, A. Artemiev, President,
member of the Board of Directors
Sales Agreement RUB 644,859.96
Baltika Breweries (Exporter) and
Baltika-Baku LLC (Importer)
36.
97

98
Date and Approval
Authority
No Contracting Parties Type of Contract Contract Price Interested party(ies)
Baltika Breweries | Annual report 2010
13.08.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, A. Artemiev, President,
member of the Board of Directors
RUB 50,000,000
Additional Agreement to the Consulting
Service Agreement as of 25.08.2005
Baltika Breweries (Consultant)
and Baltika-Baku LLC
(Company)
37.
13.08.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, A. Artemiev, President,
member of the Board of Directors
—
Additional Agreement to the Consulting
Service Agreement as of 25.08.2005
Baltika Breweries (Consultant)
and Baltika-Baku LLC
(Company)
38.
13.08.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder A. Artemiev, President,
member of the Board of Directors
Sales Agreement RUB 1,045,000
Baltika Breweries (Seller) and
OJSC Lvovska Pivovarnya
(Buyer)
39.
08.09.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, J.B. Rasmussen,
member of the Board of Directors
Quarterly license payments in the amount of 5 %
of net sales of licensed products
“Somersby” License Agreement
Carlsberg Breweries A/S
(Licensor) and Baltika Breweries
(Licensee)
40.
23.09.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, J.B. Rasmussen,
member of the Board of Directors
Alienation of the Exclusive Rights Agreement Euro 303,500, excluding Russian VAT
Baltika Breweries (Purchaser)
and Carlsberg Breweries A/S
(Rightholder)
41.
23.09.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, A. Artemiev, President,
member of the Board of Directors
Quarterly license payments in the amounts specified
below (in % of net sales of licensed products):
Beer trademark Royalty percentage
“Slavutich” 3.0
“Khmilne” 2.5
“Arsenal” 2.5
License Agreement for the production
of “Slavutich,” “Khmilne” and “Arsenal” beer.
Baltika Breweries (Licensee)
and OJSC PBK Slavutich
(Licensor)
42.
23.09.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, A. Artemiev, President,
member of the Board of Directors
Quarterly license payments in the amount of 3.5 %
of net sales of the licensed product.
License Agreement for “Lvivske” production
Baltika Breweries (Licensee)
and OJSC PBK Slavutich
(Licensor)
Baltika Breweries (Exporter)
and Baltika Deutschland GmbH
(Importer)
43.
23.09.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
Equipment Sales Agreement Euro 800
44.
25.10.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, A. Artemiev, President,
member of the Board of Directors
Product price is set at the usual Supplier costs, plus
a 5 % margin. The total price of the Contract shall
not exceed RUB 100,000,000 (one hundred million)
Beer Supply Contract
Baltika Breweries (Buyer)
and OJSC PBK Slavutich
(Supplier)
45.
25.10.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
One-time license fee of Euro 1,350,000 and
quarterly license payments in the amount of 5 %
of net sales of products (receipts), sold by the
Licensee in Latvia. The total fee and license
payments shall not exceed Euro 27,000,000 during
the entire term of the Agreement
License Agreement
Baltika Breweries (Licensor)
and AS Aldaris (Licensee)
46.
25.10.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
One-time license fee of Euro 690,000 and quarterly
license payments in the amount of 5 % of net
sales of products (receipts), sold by the Licensee
in Estonia. The total fee and license payments shall
not exceed Euro 27,000,000 during the entire term
of the Agreement
License Agreement
Baltika Breweries (Licensor)
and AS Saku (Licensee)
47.
25.10.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
One-time license fee of Euro 960,000 and quarterly
license payments in the amount of 5 % of net
sales of products (receipts), sold by the Licensee
in Lithuania. The total fee and license payments
shall not exceed Euro 27,000,000 during the entire
term of the Agreement
License Agreement
Baltika Breweries (Licensor)
and Utenos alus UAB (Licensee)
48.

Date and Approval
Authority
No Contracting Parties Type of Contract Contract Price Interested party(ies)
2010 Corporate Transactions that are Deemed Related Party Transactions Based on the Federal
Law “On Joint Stock Companies”
25.10.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
Product price is set at usual supplier costs, plus
a 5 % margin. The total price of the Contract shall
not exceed Euro 7,000,000
Beer and Beverages Supply Contract
Baltika Breweries (Supplier)
and AS Aldaris (Buyer)
49.
25.10.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
Product price is set at the usual supplier costs, plus
a 5 % margin. The total price of the Contract shall
not exceed Euro 5,000,000
Beer and Beverages Supply Contract
Baltika Breweries (Supplier)
and AS Saku (Buyer)
50.
25.10.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
Product price is set at the usual supplier costs, plus
a 5 % margin. The total price of the Contract shall
not exceed Euro 5,000,000
Beer and Beverages Supply Contract
Baltika Breweries (Supplier)
and Utenos alus UAB (Buyer)
51.
25.10.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, A. Artemiev, President,
member of the Board of Directors
Bailment Agreement USD 1,200 (one thousand two hundred)
Baltika Breweries (Bailor)
and ООО UZCARLSBERG
(Bailee)
52.
25.10.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, A. Artemiev, President,
member of the Board of Directors,
B. Søndenskov, member of the
Board of Directors
5.5 % of the price of the concluded Contract. The
estimated price of services stands at Kazakh tenge
7,922,998. Russian VAT is not applicable
Service Agreement
Baltika Breweries (Customer)
and DERBES Breweries Ltd
(Contractor)
53.
25.10.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, A. Artemiev, President,
member of the Board of Directors.
B. Søndenskov, member of the
Board of Directors
As stipulated by the primary Contract
Additional Agreement to Contract No. D-20/10
as of 01.01.2010
Baltika Breweries (Lessor) and
DERBES Breweries Ltd (Lessee)
54.
25.10.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
Euro 393,000
Additional Agreement No. 5 to Contract
No. 648 as of 01.01.2008
Baltika Breweries (Exporter) and
Carlsberg Canada Inc. (Importer)
55.
13.11.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
Marketing Cost Agreement Euro 142,350
Baltika Breweries (Beneficiary)
and Oy Sinebrychoff Ab
(Investor)
56.
13.11.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, A. Artemiev, President,
member of the Board of Directors,
B. Søndenskov, member of the
Board of Directors
—
Additional Agreement No. 1 to Contract
No. BL-AL-0809 as of 02.09.2009
Baltika Breweries (Contractor)
and DERBES Breweries Ltd
(Customer)
57.
08.12.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, A. Artemiev, President,
member of the Board of Directors
Equipment Sales Agreement RUB 5,900,000
Baltika Breweries (Seller) and
Baltika-Baku LLC (Buyer)
58.
08.12.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, J.B. Rasmussen,
member of the Board of Directors
As stipulated by the License Agreement
Additional Agreement VII to the TUBORG
Trademark License Agreement
Baltika Breweries (Licensee)
and Carlsberg Breweries A/S
(Licensor)
59.
08.12.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, J.B. Rasmussen,
member of the Board of Directors
As stipulated by the License Agreement
Additional Agreement IX to the TUBORG
Trademark License Agreement
Baltika Breweries (Licensee)
and Carlsberg Breweries A/S
(Licensor)
60.
08.12.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, J.B. Rasmussen,
member of the Board of Directors
As stipulated by the License Agreement
Additional Agreement II to the License
Agreement concluded with Carlsberg
Breweries A/S
Baltika Breweries (Licensee)
and Carlsberg Breweries A/S
(Licensor)
61.
99

100
Date and Approval
Authority
No Contracting Parties Type of Contract Contract Price Interested party(ies)
Baltika Breweries | Annual report 2010
08.12.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, A. Artemiev, President,
member of the Board of Directors
Equipment Sales Agreement RUB 100,000
Baltika Breweries (Seller)
and Baltika-Baku LLC (Buyer)
62.
24.12.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, J.B. Rasmussen,
member of the Board of Directors
Service Agreement RUB 21,029,500, excluding VAT
Baltika Breweries (Customer)
and Carlsberg Breweries A/S
(Contractor)
63.
24.12.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
Belorussian rubles 148,736,640, including 18 %
Russian VAT
Additional Agreement to Paid Service
Agreement No. 04/08-BLR as of 30.01.2008
Baltika Breweries (Customer)
and Baltika-Bel LLC (Contractor)
64.
24.12.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
Belorussian rubles 3,490,104,408, including 18 %
Russian VAT
Paid Service Agreement
Baltika Breweries (Customer)
and Baltika-Bel LLC (Contractor)
65.
24.12.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
RUB 832,891.20, including 18 % Russian VAT
Additional Agreement to Service Agreement
No. 07/08-KG as of 30.01.2008
Baltika Breweries (Customer)
and Baltika LLC (Contractor)
66.
29.12.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
As stipulated by the primary Agreement
Additional Agreement No. 7 to Service
Agreement No. 07/08-KG as of 30.01.2008
Baltika Breweries (Customer)
and Baltika”LLC (Contractor)
67.
29.12.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder
—
Additional Agreement No. 4 to Service
Agreement No. 04/08-MD as of 30.01.2008
Baltika Breweries (Customer)
and ICS Baltika SRL (Contractor)
68.
29.12.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, J.B. Rasmussen,
member of the Board of Directors
Service Agreement Euro 583.20, excluding Russian VAT
Baltika Breweries (Customer)
and Carlsberg Breweries A/S
(Contractor)
69.
29.12.2010,
the Board of Directors
Baltic Beverages Holding AB
shareholder, A. Artemiev,
President, member of the Board
of Directors. B. Søndenskov,
member of the Board of Directors
Sales Agreement RUB 188,107
Baltika Breweries (Seller)
and DERBES Brewery Ltd
(Buyer)
70.
08.04.2010,
the General
Shareholders Meeting
A. Shokhin, member of the Board
of Directors
The Agreement price is set according to current
rates of the Shipping Agent (traffic rates, fees and
the Shipping Agent’s remuneration)
Shipping Agency Agreement
Baltika Breweries (Client)
and CJSC Rusagrotrans
(Shipping Agent)
71.
08.04.2010,
the General
Shareholders Meeting
Baltic Beverages Holding AB,
J.B. Rasmussen, member of the
Board of Directors
Loan amounts shall be up to Euro 300,000,000.
The interest rates payable on each loan shall be
calculated as follows: the maximum interest rate on
deposits, offered by the most reliable Russian banks
(defined as those that hold investment ratings
assigned by Fitch Ratings, Standard & Poor’s or
Moody’s) for legal entities for the same period for
a given currency and similar amount, plus 0.15 %
per annum
General Loan Agreement
Baltika Breweries (Creditor)
and Carlsberg Breweries A/S
(Borrower)
72.

Information for Shareholders
and Investors
Baltika Breweries
Corporate Headquarters Tel.: +7 (812) 325-9325
Shareholder Relations Tel.: +7 (812) 329-9109
Registrar
Closed Joint Stock Company
Computershare Registrar,
St. Petersburg branch
Independent Auditors
Closed Joint Stock Company
KPMG, St. Petersburg branch
Closed Joint Stock Company
A&P Audit
Official print medium for information
disclosure
Corporate website for information
disclosure
Tel.: +7 (812) 251-8138
Fax: +7 (812) 346-7407
Tel.: +7 (812) 313-7300
Fax: +7 (812) 313-7301
Tel.: +7 (812) 251-6923
3 6 th Verkhny Pereulok,
St. Petersburg, Russia, 194292
Elfimov@spb.baltika.ru
Risuliev@spb.baltika.ru
4-A Izmailovsky Ave., Office 314,
St. Petersburg, Russia, 198005
www.nrcreg.ru
69-71 “A” “Renaissance Plaza”
Business Center
Marata St., St. Petersburg, Russia,
191119
stp@kpmg.ru
26 Rizhsky Ave., St. Petersburg,
Russia, 198103
apaudit@quantum.ru
Izvestia newspaper
www.corporate.balitka.ru
101

102
Baltika Breweries | Annual report 2010
Company Breweries
Baltika-St. Petersburg Brewery +7 (812) 325-9325
Baltika-Voronezh branch +7 (4732) 61-9800
Baltika-Novosibirsk branch +7 (383) 230-1402
Baltika-Pikra branch +7 (3912) 59-1200
Baltika-Rostov branch +7 (863) 250-5102
Baltika-Samara branch +7 (846) 276-4366
Baltika-Tula branch +7 (4872) 39-5535
Baltika-Khabarovsk branch +7 (4212) 41-1551
Baltika-Chelyabinsk branch +7 (351) 239-1600
Baltika-Yaroslavl branch +7 (4852) 58-3208
Foreign subsidiaries of the Company
Baltika-Bel LLC +375 (17) 286-2741
Baltika LLC
+996 (312) 30-6082
+996 (312) 30-6083
Baltika Deutschland GmbH +49 (40) 728-13928
Baltika-Baku LLC
Representative offices in foreign countries
+994 (12) 442-1280
+994 (12) 442-2010
Representative office in China +86 (10) 651-29728
3 6 th Verkhny Pereulok, St. Petersburg,
Russia, 194292
109 9 th Janvarya St., Voronezh, Russia,
394027
34 2 nd Stantsionnaya St., Novosibirsk,
Russia, 630041
90 60 let Oktyabrya St., Krasnoyarsk,
Russia, 660079
146-A Dovatora St., Rostov-on-Don,
Russia, 344090
1 Baltiisky Proezd, Kinelsky Village,
Kinelsky District, the Samara Region,
Russia, 446110
85 Odoevskoye Shosse, Tula, Russia,
300036
142 Voronezhskoye Shosse,
Khabarovsk, Russia, 680042
16 Ryleeva St., Chelyabinsk, Russia,
454087
63 Pozharskogo St., Yaroslavl, Russia,
150066
3 Gorny Pereulok, Office 11, Minsk,
Belarus, 220071
121/1 Shopokova St., Bishkek, the
Kyrgyz Republic, 720075
26 Glockengiesserwall, Hamburg,
Germany, 20095
2 Per. 2 Shamakhinskoye Shosse,
Khyrdalan Town, the Absheron District,
the Republic of Azerbaijan, AZ0100
19 Tsziangomenvai, the CITIC Building,
Tower A, Office 15-B, Beijing, the
People’s Republic of China, 100004

Сontact Information
To arrange a group tour of the Company’s production facilities:
The Company organizes regular group tours of its Russian production facilities. During these
tours, visitors can learn about key events in the corporate history, Company activities and
brewing processes. Visitors can also taste the Company’s products.
To arrange a tour, call one of our facilities at the numbers listed below:
Chelyabinsk +7 (3512) 39-1600
Khabarovsk +7 (4212) 41-1591
Krasnoyarsk +7 (3912) 59-1341
Novosibirsk +7 (383) 230-1411
Rostov +7 (863) 250-5146
Samara +7 (846) 276-4333
St. Petersburg +7 (812) 329-9139
Tula +7 (4872) 32-9910
Voronezh +7 (4732) 61-9800
Yaroslavl +7 (4852) 58-3229
The Company invites the public to visit the Siberian Brewing History Museum located at the
Baltika-Pikra production facility in Krasnoyarsk. The Museum was founded in 2005 to mark the
130 th anniversary of the Krasnoyarsk Brewery, as well as Pikra’s 15 th anniversary.
The second Brewing History Museum was founded in St. Petersburg at corporate headquarters
to mark the Company’s 20 th anniversary.
The museums have unique exhibits on display, which can be tasted during tours of production
facilities.
In 2010, more than 62,000 people visited the Company’s production facilities.
For the 1999–2010 period, the total number of visitors numbers in excess of 450,000.
Association Participation
The Company is a member of the following organizations:
“The Union of Russian Producers of Beer and Non-Alcoholic Beverages” non-profit
organization;
“The Russian Union of Industrialists and Entrepreneurs”;
“The Association of Brand Producers” non-profit partnership (RusBrand);
“The Association of Joint Ventures” (St. Petersburg);
“The Market Council on the Organization of Efficient Wholesale and Retail Trade
in Energy and Power” non-profit partnership (“The Market Council”);
“The Association of Buyers in the Wholesale and Retail Electric Power (Capacity)
Markets.”
103

Design and pagination: OOO RusGrupp | www.bcagency.ru